Key Highlights

  • Net sales were $14.522 billion in the third quarter, up 4% in dollars and constant currencies.
  • Core EPS was $2.46, up 9%, and core operating income margin was 41.6%, up 2.3 points.
  • Net income fell 70% to $1.196 billion after a $1.9 billion partial impairment.
  • Kisqali sales rose 37% to $1.821 billion, while Entresto fell 38% to $1.165 billion.
  • Core operating income is now guided in line to low single-digit growth, from a low single-digit decline.

Novartis Earnings: How Did the Quarter Compare and What Changed in Guidance?

Novartis (NYSE:NVS) reported third-quarter results on Tuesday, October 27. Net sales were $14.522 billion, up 4%. Core operating income rose 11% to $6.036 billion (10% in constant currencies), and core EPS was $2.46, up 9%, against analyst estimates of about $2.24 as screened.

Management raised full-year 2026 core operating income guidance to in line to low single-digit growth in constant currencies, from a low single-digit decline. Net sales are still expected to grow low single digits. Late-October exchange rates would add about 1 point to both measures.

Novartis Product Sales: Is Growth Outrunning Generic Erosion?

Volume added 14 percentage points to net sales while generic competition subtracted 9 points and pricing 1 point; currency had no impact. Kisqali sales rose 37% to $1.821 billion, Cosentyx 9% to $1.857 billion and Kesimpta 21% to $1.484 billion. Scemblix rose 66% to $593 million, Leqvio 64% to $506 million and Pluvicto 20% to $674 million.

Entresto sales fell 38% to $1.165 billion as generics arrived. Management attributed core growth to priority brands and launches offsetting that erosion.

Novartis Profit Gap: Why Did Net Income Fall 70%?

Operating income dropped 59% to $1.843 billion and net income fell 70% to $1.196 billion. The company cited higher research and development costs, including a $1.9 billion partial impairment after del-desiran missed its primary endpoint in the Phase III HARBOR study in myotonic dystrophy, plus higher other expenses and interest.

Pelacarsen also missed its primary endpoint in the Phase III HORIZON trial, and a remibrutinib study in generalized myasthenia gravis was stopped after a futility analysis. Positives included remibrutinib meeting its primary endpoint in two relapsing multiple sclerosis studies, an FDA approval for Rhapsido in symptomatic dermographism and approvals for Pluvicto in hormone-sensitive prostate cancer. The CHMP also issued a positive opinion for Cosentyx in polymyalgia rheumatica, and a six-year analysis of Kisqali's NATALEE study showed an overall survival benefit.

Novartis Balance Sheet: What Did Acquisitions and Buybacks Do to Debt?

Free cash flow was $5.111 billion, down 18%. Net debt reached $37.4 billion at September 30, up from $21.9 billion at year-end, as $16.7 billion of acquisitions, a $9.1 billion dividend and $4.8 billion of buybacks outweighed $14.0 billion of free cash flow.

Over nine months the company repurchased 30.9 million shares for $4.7 billion, including 18.8 million shares for $2.8 billion under its up-to-$10 billion program, with up to $4.9 billion still to be executed.

Novartis Next Steps: What Should Investors Watch After the Raise?

Key items are the EU and FDA steps for remibrutinib, pelabresib and del-zota, which received priority review for DMD44, and the pace of Entresto erosion against Kisqali growth. Net debt, now $37.4 billion, and the remaining $4.9 billion of buyback capacity are the balance sheet measures to follow into the fourth-quarter report.