Novartis today blamed currency fluctuations for fourth-quarter profits that missed analysts’ forecasts, while giving the same cautious forecast for 2014 that it gave last year as generic competition looms for one of its longtime blockbusters.

The company’s fourth-quarter net income slipped 3% to $2.96 billion or $1.20 a share, on revenue that rose 2% to $15.1 billion. Novartis blamed the profit dip on weakening currencies in Japan and emerging-market countries, as well as a strengthening Swiss franc, and noted that in constant currency (CC) terms, its net income showed a 4% gain on a 4% increase in net sales.

For all of 2013, net income was all but flat, dipping –0.3% to $12.533 billion from $12.576 billion in 2012, while net sales rose 2% to $57.9 billion. After currency fluctuations are accounted for, full-year profit rose 5% on a 4% net sales gain—not bad, according to Novartis, for a year in which it weathered a sales erosion of $2.2 billion due to generic competition.

When generic competition is excluded, Novartis says its underlying core operating income grew 10% in CC terms.

“Novartis delivered strong performance in 2013, growing both net sales and core operating income in constant currencies while absorbing patent expirations,” CEO Joseph Jimenez said in a statement.

Jimenez also trumpeted the company’s regulatory success in 2013—18 approvals and 3 FDA breakthrough therapy designations—paced by approvals for Ultibro Breezhaler in COPD and Bexsero in meningitis B infections, as well as the company’s first European approval (marketing authorization in Denmark) for AirFluSal Forspiro in asthma and COPD during the fourth quarter.

During the fourth quarter, Novartis’ pharmaceuticals division saw its core operating income excluding exceptional charges fell 6% to $2.1 billion (but rose 2% in CC terms) on net sales that rose to $8.3 billion, up 1% in reported and 4% CC terms. “Growth” products with patent exclusivity through at least 2017 in the United States, Europe, and Japan accounted for 40% of the division’s net sales, up from 33% in the fourth quarter of 2012.

The Alcon eyecare unit racked up $2.7 billion in net sales (up 3% reported, 6% CC) while core operating income slid 5% (up 1% CC) to $851 million. Sandoz, the company’s generics and biosimilars unit, saw core operating income fall 10% (down 6% CC)  to $373 million on net sales that rose 1% (both reported and CC) to $2.4 billion.

At $1.20 per share, Novartis’ earnings per share just missed the $1.21 per share mark estimated to Bloomberg by a consensus of analysts, and a $1.28 EPS mean estimate by analysts to Reuters—though Odile Rundquist, an analyst at Helvea SA in Geneva, told Bloomberg: “If you strip out currency effects, Novartis absolutely had a good quarter.”

For 2014, Novartis projected sales increases “at a low- to mid-single-digit rate,” with the company expecting to lose $3 billion in sales if a generic monotherapy version of Diovan is launched in the United States during the second quarter of 2014. Novartis has benefited to date from the FDA’s hamstringing of Ranbaxy. (Ranbaxy hoped to launch its generic version of the blood pressure treatment, but the FDA barred the Indian company from importing to the United States ingredients from plants where the agency has raised issues about product quality.)

The company projects total or “group” net sales growing at least mid-single digits, and core operating income growing ahead of sales. That overall estimate assumes Novartis’ pharmaceuticals division will simply replicate its 2013 performance, while its Alcon eyecare and Sandoz generics and biosimilars units are expected to grow by a “mid- to high-single-digit” percentage.

For 2013, pharmaceuticals stayed flat at $32.2 billion (but up 3% CC), while Alcon chipped in another $10.5 billion (up 3% reported or 5% CC), and Sandoz, $9.2 billion (up 5% both in reported and CC terms).

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