In This Article:
Key Points
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Weight-loss drug maker Novo Nordisk reported an earnings beat, but sales fell short of expectations.
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Management gave an encouraging outlook for the rest of 2025.
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Novo Nordisk trades for less than half of its all-time high, and management addressed a key reason why.
Here's our initial take on Novo Nordisk's (NYSE: NVO) fiscal 2025 first-quarter financial report.
Key Metrics
| Metric (all figures in Danish kroner) | Q1 2024 | Q1 2025 | Change | vs. Expectations |
|---|---|---|---|---|
| Revenue | 65.35 billion | 78.09 billion | 19% | Missed |
| Earnings per share | 5.68 | 6.53 | 15% | Beat |
| Operating profit | 31.85 billion | 38.79 billion | 22% | n/a |
| Obesity care sales | 11.2 billion | 18.4 billion | 65% | n/a |
Slower-Than-Expected Sales but a Positive Outlook
Novo Nordisk beat earnings estimates but slightly missed top-line revenue expectations. However, the results throughout its business were quite strong, and management gave an upbeat outlook for the rest of the year -- which was exactly what investors were looking for.
Let's start with the business results. First, note that Novo Nordisk reports its results in Danish kroner (its local currency), and all of these figures are at constant exchange rates.
Overall, sales increased by 18% at constant exchange rates, with both U.S. and international sales growing at almost the same rate. The company's diabetes and obesity care sales, which make up 94% of the total, grew by 19%.
The main story of the earnings report was Novo Nordisk's 2025 guidance, which calls for sales to grow from 13% to 21%. CEO Lars Fruergaard Jorgensen said that the company is "actively focused on preventing unlawful and unsafe compounding and on efforts to expand patient access to our GLP-1 treatments." In a CNBC interview on the same day as the earnings release, Jorgensen said that he expects copycat compounder sales to start declining in the second half of the year, following the removal of semaglutide injectables from the FDA drug shortage list, and for these sales to start coming to Novo Nordisk.
Immediate Market Reaction
The immediate market reaction to Novo Nordisk's earnings report was a positive one. As of 7 a.m. EDT, a few hours after the earnings release, shares of the drugmaker were up by about 5%. In short, the upbeat comments by the CEO about the potential sales boost in the second half of the year outweigh the first quarter revenue miss.
What to Watch
Obviously, the main thing to watch will be whether Jorgensen's prediction of less competition from other compounders actually plays out in the second half of the year. If it does, it's entirely possible that Novo Nordisk could soar. After all, the stock is trading for less than half of its 52-week high, and competitive pressure from copycat drugmakers is a big reason.