GENEVA—Alcon (SIX/NYSE:ALC) said this week that its second-quarter sales increased 5 percent on a reported basis to $2.2 billion, and noted that the increase was 10 percent on a constant currency basis. Sales in both surgical and vision care in the second quarter ended June 30 benefited from “product innovation, continued recovery across international markets from the COVID-19 pandemic and sales from acquired products,” the company’s announcement noted. Operating income in the second quarter totaled $200 million, with an operating margin of 9.1 percent.

The operating margin increased 0.2 percentage points on a constant currency basis, driven by improved operating leverage from higher sales, partially offset by intangible asset impairments, increased inflationary impacts and higher amortization for intangible assets due to recent acquisitions, Alcon said. There was a negative 2.0 percent impact on operating margin from currency.
 
“Our second-quarter results reflect the outstanding effort of the entire Alcon team,” David J. Endicott, chief executive officer, said in the earnings announcement. “We worked diligently to offset the significant macroeconomic headwinds we saw in the quarter, and our team clearly delivered.”
 
He added, “We see strong demand for our innovative products by doctors, patients and consumers around the world. This, coupled with ongoing recovery across international markets, drove another quarter of strong sales growth."
 
In the vision care segment, growth was driven by improvements across international markets and silicone hydrogel contact lenses. Net sales rose 2 percent on a reported basis to $0.9 billion, which includes both contact lenses and ocular health. On a constant currency basis, the increase was 7 percent in the quarter. Strong sales growth in contact lenses was partially offset by softer ocular health growth, Alcon said.
 
Contact lens sales (which totaled $547 million in the quarter, up 9 percent in the quarter on a constant currency basis, and 11 percent for the first half of the year) benefited from growth in silicone hydrogel contact lenses, including the Precision1 and Dailies Total1 product families and Total30, partially offset by declines in other reusable and non-silicone hydrogel daily lenses in the U.S.
 
On a conference call with securities analysts, Endicott said Alcon’s “underlying business continues to perform well,” despite the macroeconomic headwinds. “We're launching new products and gaining share in both franchises. We continue to invest in the business and we're creating operating leverage and expanding margins.
 
"As we look to the future, our focus remains the same. We'll continue to fuel our innovative engine by prudently managing our resources, all the while we remain committed to creating long term value for our shareholders,” Endicott said.
 
Also on the conference call, chief financial officer Tim Stonesifer said, “We continue to see strong demand for Precision1 and the Total brand families as the recent launches of Dailies Total1 for astigmatism, and Total 30 continue to gain traction and take share. This growth was partially offset by declines in other reusable and non-SiHy daily lenses.”
 
Growth in ocular health was led by demand for Systane dry eye and Simbrinza glaucoma eye drops, as well as improvements across international markets, partially offset by supply chain challenges, primarily in contact lens care, the announcement noted.
 
For the first half of 2022, vision care net sales increased 6 percent, or 10 percent, on a constant currency basis, compared with the first half of 2021.
 
In the surgical category, Alcon said growth was driven by improvements across international markets and advanced technology intraocular lenses. Surgical net sales totaled $1.3 billion, which includes implantables, consumables and equipment/other. The increased was 7 percent on a reported basis and 13 percent on a constant currency basis, compared with the second quarter of 2021.
 
For the first half of 2022, surgical net sales increased 12 percent, or 17 percent on a constant currency basis, versus the first half of 2021.
 
Endicott said, “Looking forward, we expect the macroeconomic environment, particularly foreign exchange, to remain challenging for the rest of the year. Despite these headwinds, our focus will continue to be on executing new product launches, advancing our robust pipeline and driving profitability through operating leverage.”