Novo Nordisk 1Q Was Boosted by Stockpiling Amid Virus Outbreak -- Earnings Review
May 06 2020 - 6:08AM
Dow Jones News
By Dominic Chopping
Novo Nordisk A/S reported results for the first quarter on
Wednesday. Here's what we watched:
SALES FORECAST: Sales rose 16% to 33.88 billion Danish kroner
($4.96 billion) against analysts' expectations of DKK31.79 billion
as patients in the U.S. and Europe in particular stockpiled
medicines during the coronavirus outbreak.
NET PROFIT FORECAST: Net profit for the first three months of
the year rose to DKK11.9 billion from DKK10.45 billion a year
earlier, beating the DKK11.1 billion forecast by analysts in a
FactSet poll.
WHAT WE WATCHED:
GLUCAGON-LIKE PEPTIDE-1: Sales of Novo Nordisk's glucagon-like
peptide-1 products for type 2 diabetes--Victoza, Ozempic and
Rybelsus--increased by 40% measured in Danish kroner and by 37% in
local currencies to DKK33.2 billion in 1Q. Sales growth was driven
by both its North America and international operations, it said.
The sales increase was also boosted by Covid-19-related
stockpiling. Sales totaled DKK4.76 billion and Ozempic has now been
launched in 34 countries. The GLP-1 segment's value share of the
total diabetes market has increased to 19.0% compared with 15.2% a
year ago, and Novo Nordisk said it has a 48.3% market share in the
global GLP-1 segment. Sales of obesity drug Saxenda rose 30% in the
quarter to DKK1.58 billion.
MARGINS: The gross margin was 84.1% in the first quarter of 2020
compared with 83.8% in the same period last year. The increase in
the gross margin reflects a positive product mix driven by
increased GLP-1 sales, productivity improvement--mainly within
insulin and GLP-1 production--and a positive currency impact of 0.2
percentage point, partly countered by a negative impact from lower
realized prices in the U.S. The earnings before interest and taxes
margin slipped to 48.1% from 48.6%.
GUIDANCE: Novo Nordisk backed guidance for 2020 sales growth of
3% to 6% measured in local currencies, and growth reported in
Danish kroner one percentage point higher than in local currencies.
Operating profit growth is also still expected to be 1% to 5%
measured in local currencies and one percentage point higher when
reported in Danish kroner. Capital expenditure is still expected to
be around DKK6.5 billion in 2020. Financial items are now seen at a
loss of around DKK2.5 billion from a loss of DKK1.5 billion
previously, mainly reflecting foreign exchange hedging
contracts.
Write to Dominic Chopping at dominic.chopping@wsj.com
(END) Dow Jones Newswires
May 06, 2020 05:53 ET (09:53 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.
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