Zurich - AFP
Swiss pharmaceutical giant Novartis said Tuesday that its first quarter net profit fell 4.0 percent to $2.82 billion, mainly due to financing costs related to its purchase of eyecare giant Alcon.
One-off costs associated with merging Alcon over the next three years are expected to reach $600 million. The sum includes severance, retention and relocation charges, said the group.
The integration of Alcon into Novartis\' IT platform alone is estimated to cost around $350 million, it added in its earnings statement.
Meanwhile, sales were up 16 percent in the first three months of the year at $14 billion, as the group benefitted from reporting in the US dollar, which has weakened against most key currencies.
The currency impact translated to a 2.0 percent boost on sales, noted the group.
Novartis chief executive Joseph Jimenez expressed satisfaction at the results, saying that \"contributions from all businesses led to a good start in 2011.\"
The Basel-based group confirmed its targets for the year, saying that it expects sales to \"grow around the double-digit mark in 2011.\"
It added that if exchange rates in March were to prevail for the whole year, there would be a positive impact of 3.0 percent on sales, and a negative impact of -2.0 percent on its operating income for the full year.