Alcon Says ‘Healthy Momentum’ in Surgical Business Highlighted First-Quarter Performance

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GENEVA, Switzerland—Alcon (SIX/NYSE:ALC), which was spun off as an independent company by Novartis earlier this year, said Thursday that its first-quarter sales increased 4 percent at constant exchange, but were “flat to last year” at $1.8 billion on a “reported” basis. This marked the first time Alcon has reported results as a public company since its acquisition by Novartis in late 2010. Alcon also reported an operating loss of $48 million in the quarter, which compares with last year’s operating income of $73 million.

The reversal was due “to costs related to spin readiness, legal, SAP implementation and research and development,” the announcement noted. The decrease in first quarter 2019 core operating income of $314 million compared to $342 million last year, was driven by costs related to SAP implementation and higher research and development, according to the announcement.

Looking ahead, Alcon said it expects full-year 2019 sales to increase in the 3 percent to 5 percent range at constant currency, and a core operating margin in the range of 17 percent to 18 percent.

“The spin-off of Alcon marks a new chapter in our mission to enable more patients to see brilliantly,” Alcon chief executive officer David Endicott said in the announcement. “Solid first quarter results give us confidence in our ability to perform as an independent company and to continue to execute on our key growth drivers.”

In the vision care business segment, net sales (including contact lenses and ocular health) totaled $777 million, a decrease of 3 percent (up 1 percent at constant currency) compared with the year-ago first quarter. “Double-digit growth for Dailies Total1 and strong demand for Systane Complete were offset by declines in legacy non-silicon hydrogel contact lenses and contact lens care,” the announcement noted.

The company’s surgical business achieved 2 percent reported growth (sales total of $1 billion) and 7 percent growth at constant currency.

Endicott added, “Our surgical business performed well in the quarter, with growth across all three categories. As we usher in a new era for Alcon, our dedicated focus on delivering innovative products and quality eyecare to patients around the world will allow us to create long-term shareholder value.”