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Investing.com -- Alcon (SIX:ALCC) on Wednesday reported solid fourth-quarter 2024 results, with strong performance in its Vision Care segment, though foreign exchange headwinds are expected to weigh on the company’s 2025 guidance.
Shares of the company were up 5.9% at 06:14 ET (11:14 GMT).
The Swiss-American pharmaceutical and medical device company posted net sales of $2.477 billion for the quarter, representing a year-over-year increase of 6.2%, slightly exceeding estimates.
The Surgical segment recorded revenue of $1.423 billion, marking a 5.3% increase from the previous year.
Growth was largely driven by consumables, which saw a 7% year-over-year increase when adjusted for currency effects, while implantables and equipment each grew by 2% on the same basis.
Vision Care revenue reached $1.05 billion, reflecting a 7.6% annual increase, primarily fueled by strong demand for contact lenses, which posted an 11% increase when adjusted for currency fluctuations.
Ocular health growth was more modest at 2%, with positive contributions from its eye drop portfolio, particularly Systane, though offset by a decline in contact lens care sales and divestiture in China.
Alcon’s core earnings per share for the quarter stood at $0.72, aligning with estimates. Gross margins improved, coming in 110 basis points higher than expected, contributing to the company’s strong quarterly performance.
However, despite the solid results, Alcon’s 2025 guidance reflects foreign exchange-related pressures.
The company projects full-year revenue growth of 6% to 8% on a constant currency basis, with total expected sales between $10.2 billion and $10.4 billion.
This is slightly below consensus estimates of $10.41 billion. Core operating margins are expected in the range of 21% to 22%, with core EPS guidance between $3.15 and $3.25, falling short of Wall Street estimates of $3.30.
Needham analysts noted that while 2025 guidance was below expectations, it was better than initially feared given prior warnings about currency movements.
Segment results were largely in line with projections, with minor variations. Implantables slightly missed consensus but performed better than expected considering competitive pressures.
Vision Care was a key driver of margin expansion, with Alcon (NYSE:ALC) likely gaining market share in the contact lens segment compared to competitors such as BLCO and JNJ.
Alcon’s operating margin guidance came in slightly above expectations at the midpoint. The company’s gross margin reached 62.7%, up 60 basis points year-over-year, and core operating margin expanded 120 basis points year-over-year to 20.1%, beating consensus expectations.
Management guided for a 2025 core operating margin range of 21% to 22%, compared to the consensus estimate of 21.1%.
Analysts at BTIG and Needham view the projected 6% to 8% growth in 2025, excluding currency effects, as a strong indicator of continued operational strength.