Alcon continues to struggle

Novartis’ Chief Executive Joe Jimenez this week warned that its Alcon eye care division will take longer to turn around than expected, as sales fell 3% in constant currencies to $1.4 billion, with an operating loss of $50 million.

After predicting earlier this year that the division's new head Michael Ball would have it growing at a low-single-digit percentage rate by the year-end, Jimenez said Alcon's sales this quarter will be "flat to down slightly."

Novartis has attributed problems at Alcon to a “failure to innovate and inconsistent customer service”.

Surgical sales were down 4% in constant currencies, impacted by lower IOL sales and a continued decline in cataract equipment, primarily the LenSx femtosecond laser, which has reached high penetration in its market segment. Cataract consumables continue to be a bright spot in Alcon sales, increasing by 4%. Vision Care sales were flat, as contact lenses delivered another quarter of growth.

Overall net income at Novartis fell 4% to $2.938 billion, but still beat analysts’ forecast of $2.9 billion, while sales slipped 1% to $12.1 billion, compared with a forecast of $12.25 billion.

Meanwhile, Novartis has delayed unloading its 6% Roche stake, which could total $14 billion. Reports suggest that the path has been laid for the sale to take place, but has been “iced” for unknown reasons, quoting investment bankers hired to market the shares to institutional investors. Novartis has refused to comment on the matter.