Novartis raises its 2026 profit outlook after third-quarter results
Oct 28, 2026
Novartis (NYSE: NVS) reported its third-quarter 2026 results on Tuesday, October 27, 2026 and raised its full-year outlook for core operating income.
Third-quarter results
According to the company's release, compared with the third quarter of 2025:
- net sales rose 4% to $14.5 billion, in both US dollars and constant currencies
- core operating income rose 10% in constant currencies (11% in US dollars) to $6.0 billion, with a core margin of 41.6%
- core earnings per share were $2.46, up 8% in constant currencies
- operating income fell 61% in constant currencies to $1.8 billion
- net income fell 71% in constant currencies to $1.2 billion
- free cash flow was $5.1 billion, down 18%
Novartis said the fall in operating income reflected higher R&D expenses, including a $1.9 billion partial impairment of its del-desiran asset, and higher other expenses, partly offset by higher sales. Del-desiran is an experimental medicine for myotonic dystrophy type 1 (DM1). The company reported that its Phase III HARBOR study did not meet its primary endpoint.
Core and reported figures
Novartis reports both "core" and reported (IFRS) figures. Core figures exclude items such as impairments, amortisation and certain one-off costs. That is why core operating income rose in the quarter while reported operating income fell. Constant currency figures remove the effect of exchange rate changes.
Main products
According to the release, third-quarter sales for selected medicines were:
- Cosentyx (psoriasis and other inflammatory conditions): $1.86 billion, up 9%
- Kisqali (breast cancer): $1.82 billion, up 37%
- Kesimpta (multiple sclerosis): $1.48 billion, up 22% in constant currencies
- Entresto (heart failure): $1.17 billion, down 38%
- Pluvicto (prostate cancer): $674 million, up 20%
- Scemblix (leukaemia): $593 million, up 67% in constant currencies
- Leqvio (cholesterol): $506 million, up 63% in constant currencies
The company said volume growth added 14 percentage points to sales in the quarter, while generic competition reduced sales by 9 percentage points. Entresto now faces generic competition in some markets.
Updated guidance
Novartis now expects full-year 2026 core operating income to be in line with 2025 or to grow by a low single-digit percentage in constant currencies. Its previous guidance was for a low single-digit decline. The company kept its outlook for net sales to grow by a low single-digit percentage.
First nine months
For the first nine months of 2026, net sales were $42.0 billion, unchanged in constant currencies, and core earnings per share were $6.85, down 3% in constant currencies.
Share buybacks
In the first nine months, Novartis bought back 30.9 million shares for $4.7 billion. Of this, $2.8 billion was under its programme of up to $10 billion announced in July 2025, leaving up to $4.9 billion to be executed.
Pipeline updates
The company reported several pipeline updates in the quarter. Remibrutinib showed positive Phase III results in relapsing multiple sclerosis, while a Phase III study of the same medicine in generalised myasthenia gravis was stopped after a futility analysis. Pluvicto received approvals in the US and China for an earlier stage of prostate cancer. Pelacarsen, an experimental cholesterol medicine, did not meet its primary endpoint in the Phase III HORIZON study.
What to watch
Key items include sales of newer medicines, the effect of generic competition on older products, further pipeline results and the full-year results early next year.
Risks and uncertainties
Clinical trials can fail, and regulatory decisions can be delayed or negative. Generic and biosimilar competition and pricing pressure can reduce sales. Pharmaceutical shares can be volatile.
What this means for investors
For Investing.one users following NVS, the updated guidance and product trends may be relevant. The information above is based on the company's results release.
Sources
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