Alcon (ALC) Q2 Earnings Meet Estimates, Revenues Increase Y/Y

Core Earnings and Revenue Performance - Alcon, Inc. reported core earnings per share (EPS) of 74 cents for Q2 2024, reflecting a 7.2% increase year-over-year, and a 15% increase at constant exchange rates (CER) [1] - The company's diluted EPS was 45 cents, marking a 32.4% year-over-year increase [1] - Net sales for Q2 were $2.48 billion, which was 1.4% below the Zacks Consensus Estimate, but represented a 3.3% increase from the previous year (6% at CER) [2] Segment Performance - Alcon operates through two segments: Surgical and Vision Care [3] - Surgical sales reached $1.42 billion, up 3% year-over-year and 6% at CER, with Implantables sales increasing by 6% driven by demand for advanced technology intraocular lenses [4] - Vision Care segment reported sales of $1.11 billion, a 7% increase year-over-year and 10% at CER, with Contact Lenses sales rising by 9% due to product innovation [5] Margins and Expenses - The cost of net sales was $1.12 billion, up 5.9% year-over-year, while core gross profit rose 0.8% to $1.37 billion, leading to a core gross margin contraction of 123 basis points to 55.1% [6] - Selling, General and Administrative (SG&A) expenses increased by 0.6%, and Research and Development (R&D) expenses rose by 1.4% year-over-year, resulting in a core operating margin decline of 26 basis points to 12.7% [6] Financial Position - Alcon ended Q2 2024 with cash and cash equivalents of $1.37 billion, up from $1.14 billion at the end of Q1 [7] - Cumulative net cash flow from operating activities was $871 million, compared to $410 million in the same period last year, with free cash flow totaling $667 million, up from $189 million [7] 2024 Outlook - Alcon maintained its 2024 financial outlook, expecting net sales between $9.90 billion and $10.10 billion, indicating a growth of 7%-9% at CER from 2023 [8] - Core EPS for the full year is projected to be in the range of $3.00-$3.10, suggesting a growth of 15%-18% at CER from 2023 [8] Overall Assessment - Alcon's Q2 2024 results showed in-line earnings, although revenues fell short of estimates, with year-over-year improvement driven by strong demand for innovative products and effective execution [9] - The company is preparing for product launches in the second half of the year, which are expected to contribute to growth in 2025 and beyond [9]