Swiss drug maker Novartis AG today reported a 4% decline in net income at $2.82 billion in the January-March period of 2011, hit by strong swiss franc, loss at vaccine unit vaccine unit and financing cost related to the buyout of Alcon.
In the year-ago period, the company had a net income of $2.94 billion, Novartis said in a statement.
Novartis has attributed its decline in quarter earnings to loss at the group's vaccines unit, higher financing costs to eyecare firm Alcon's acquisition coupled with strong Swiss franc.
The company's net sales rose by 16% from year-ago period to $14.02 billion in the first quarter to March, 2011 as the currency benefited sales by two per cent as the dollar weakened against most currencies.
Novartis CEO Joseph Jimenez said that contributions from all businesses led to a good start in 2011 as the company achieved robust growth in the first quarter.
Novartis said it continued to maintain strong presence in key emerging markets, particularly in China, Russia, Brazil and India. In the first quarter, the company's sales grew 2%in its top six emerging markets, which include South Korea and Turkey in addition to the BRIC countries.
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In vaccines, sales fell sharply by 73% to $371 million, that pushed the unit into an operating loss of $24 million as against a a profit of $923 million in the year-ago period.
Looking ahead, the company expect that net sales would grow around the the double-digit mark in 2011. It aim to improve core operating income margin despite rising competition from generic drugs, price cuts, and lower sales of pandemic anti-flu vaccine.