Novartis AG (NOVN), Europe´s second- biggest drugmaker by sales, raised its sales target and cost savings forecast for Alcon, the eye-care company it finished acquiring this year.
Alcon aims to expand sales by a high-single to low-double- digit percentage, Basel, Switzerland-based Novartis said in a statement today. The maker of contact lenses and equipment for eye surgery previously forecast growth in the mid- to high- single digits. Novartis expects savings in the unit of $350 million a year by 2013, it said, compared with previously forecast savings of $300 million.
Productivity improvements across Novartis contributed to more than $1.2 billion in savings in the first half, and the total for the year will probably exceed the $1.9 billion achieved in 2010, the drugmaker said. It hadn’t previously predicted 2011 cost savings.
“If you look at their quarterly numbers, they are taking out costs, but they’ve never communicated future cost savings in such a way that people can plug it into their models,” Jack Scannell, an analyst at Sanford C. Bernstein Ltd. in London, said in an interview today. “This may be one of the reasons the stock has been a bit of a disappointment. A more explicit approach will give investors a bit more confidence.”
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