Alcon second-quarter adjusted EPS increases 14.4% to $2.22 per share

Jul 27 2010

The Alcon Independent Director Committee (the "Committee") noted today that Alcon once again delivered strong earnings in the second quarter of 2010. Alcon's 2Q 2010 Adjusted EPS of $2.22 per share represented a year-over-year growth rate of 14.4% and exceeded Wall Street's mean consensus estimate of $2.03 per share by 9.4%. Alcon's strong EPS growth was driven by an 11.3% increase in organic sales resulting, in part, from a 22.3% increase in advanced technology intraocular lens sales, a 17.2% increase in glaucoma sales and a 24.2% increase in emerging market sales.

Since the beginning of the year, Alcon has raised its full-year 2010 EPS guidance from a range of $7.30 - $7.55 per share to $7.45 - $7.62 per share. This steady earnings generation and ability to exceed consensus Wall Street expectations, even in the face of macro-economic and regulatory challenges and uncertainties, underscores why investors have consistently afforded Alcon a premium valuation compared to peers. In response to Alcon's strong performance this year, Wall Street research analysts have raised consensus estimates for Alcon for 2010, as well as the outlook for 2011 and beyond.

Thomas G. Plaskett, Chairman of the Committee, said, "Alcon has delivered yet another impressive quarter, and has raised its sales and earnings guidance for the year. These latest results highlight the fact that Alcon's underlying business fundamentals continue to build upon the momentum of previous quarters. The results also further illustrate management's ability to exceed the market's expectations on a consistent basis. In addition to strong operating results, Alcon recently announced the acquisition of LenSx Lasers, Inc., which is yet another example of the strategic business development activities that Alcon has undertaken over the past two years to drive near and long-term revenue growth, meaningfully strengthen its new product pipeline and add new platform capabilities. These activities were not part of the plan when Novartis first announced its acquisition of Nestlé's shares in 2008, and they add meaningfully to Alcon's intrinsic value."

Mr. Plaskett continued, "We encourage Novartis to recognize the Company and its employees for their efforts and reflect it in Novartis' valuation of Alcon's minority shares. Our recent investor meeting in New York demonstrated the steadfast support the Committee has from the minority shareholders, who believe strongly that Novartis must deliver appropriate value for their shares."

Novartis' current offer of 2.8 shares of Novartis stock for each outstanding share of Alcon stock is currently valued at approximately $138, which represents a ~24% discount to the $181.71 that Nestlé is receiving for control and a ~16% and ~8% discount to the prices one day and one month before Novartis' offer was made, respectively.