Shares of Alcon (SIX:ALCC) fell after the company reported its second quarter results, which missed analyst expectations for both revenue and EBIT margin.
At 4:22 am (0822 GMT), Alcon was trading 2.9% lower at CHF 80.28.
Despite this, Alcon reaffirmed its full-year 2024 guidance, maintaining a positive outlook for the rest of the fiscal year.
However, concerns remain about the company's ability to meet consensus expectations, particularly in light of weaker-than-expected performance in key segments such as Equipment and Ocular Health.
As per analysts at RBC (TSX:RY) Capital Markets, the pharmaceutical and medical device company's second quarter revenues were 1.4% below the Visible Alpha consensus, while the EBIT margin was 30 basis points lower than anticipated.
Despite these misses, the company's earnings per share (EPS) were 1.4% ahead of expectations.
The company's growth was largely driven by its Surgical Care and Vision Care segments, both of which grew at a constant exchange rate (CER) of 6%. While the Implantables segment outperformed expectations, growing at 9% CER, driven by advanced technology intraocular lenses (IOLs) in international markets.
However, this was offset by weaker performance in the Equipment segment, which saw a decline of 1% CER, and Ocular Health, which grew at just 2% CER—nearly 6 percentage points below expectations.
“The miss is unhelpful given the share strength this year and we expect investors to take this poorly initially. That said, the strong Implantables print, the positive update on the Dry Eye submission and the likelihood of a mechanical step up in margins in H2 should help to offset most of this,” said analysts at UBS Global Research in a note.
Alcon's management reaffirmed its FY2024 guidance, forecasting revenue growth of 7-9%, an operating margin between 20.5-21.5%, and EPS between $3.00 and $3.10.
“We see the reiteration of FY2024 guidance as positive, although we flag that the slight revenue and EBIT margin misses, as well as weaker than expected performance in Equipment and Ocular Health, incrementally increase risk to delivering on FY2024 consensus expectations,” the analysts said.