Alcon's Q2 Earnings Beat Estimates, Revenues Miss, Stock Plunges

Alcon, Inc. ALC delivered second-quarter 2025 core earnings per share (EPS) of 76 cents, up 2.7% from the year-ago quarter’s figure. At the constant exchange rate or CER, the figure increased 1% year over year. The metric topped the Zacks Consensus Estimate by 7.04%.

Alcon reports “core” results based on non-IFRS (International Financial Reporting Standards) measures. In the second quarter, the company’s EPS was 35 cents, down 22.2% (25% at CER) year over year.

ALC’s Q2 Revenues in Detail

Net sales to third parties in the quarter under review were $2.58 billion, which missed the Zacks Consensus Estimate by 1.29%. However, the top line increased 3.8% from the year-ago quarter’s level (up 3% at CER).

Following the Aug.19 announcement, ALC's stock price fell 10.1% to close at $81.04 yesterday.

Segmental Breakup of Alcon’s Q2 Revenues

Alcon reports operations through two segments — Surgical (comprising Implantables, Consumables and Equipment/Other) and Vision Care (comprising Contact Lenses and Ocular Health).

Surgical

Surgical sales amounted to $1.5 billion, up 2% year over year on a reported basis (up 1% at CER).

Within this, net sales in Implantables dropped 2% at CER, reflecting soft market conditions and competitive pressures.

Alcon Price, Consensus and EPS Surprise

Alcon price-consensus-eps-surprise-chart | Alcon Quote

Consumables net sales increased 4% at CER. Growth was led by vitreoretinal and cataract consumables, mainly in international markets, and price increases, and reflects soft market conditions.

Equipment/Other net sales were down 1% at CER as declines in legacy equipment were partially offset by sales of the recently launched Unity VCS and Voyager DSLT devices.

Vision Care

The segment reported total sales of $1.1 billion, up 6% year over year on a reported basis and 5% at CER.

Net sales of Contact Lenses increased 7% year over year at CER, driven by product innovation and price increases.

Ocular Health sales rose 2% year over year at CER, primarily driven by the portfolio of eye drops, partially offset by declines in contact lens care. The year-ago quarter included sales of certain eye drops in China, which were divested and out-licensed in late 2024.

ALC’s Q2 Margin Performance

The cost of net sales in the second quarter was $1.19 billion, up 7.9% year over year. The gross profit rose 0.5% to $1.38 billion. Meanwhile, the core gross margin contracted 177 basis points (bps) to 53.5%.

SG&A expenses increased 3.9% year over year, while R&D expenses rose 11.4%. The operating margin contracted 245 bps in the second quarter to 10.3%.

Alcon’s Financial Position

Alcon exited the second quarter of 2025 with cash and cash equivalents of $1.41 billion, almost consistent with the first-quarter levels.

The cumulative net cash flow from operating activities at the end of the second quarter was $889 million compared with $871 million in the year-ago period. Free cash flow totaled $681 million compared with $667 million in the same period of 2024.

ALC’s 2025 Outlook

The company now anticipates 2025 net sales in the range of $10.3-$10.4 billion (earlier $10.4-$10.5 billion), indicating year-over-year growth of 4%-5% (previously 6%-7%) at CER. The Zacks Consensus Estimate for ALC’s revenues is pegged at $10.41 billion.

Core EPS for the full year is expected in the range of $3.05-$3.15 (same as earlier). The revised growth forecast is 0%-2% (earlier 2-5% at CER) from the 2024 levels. The Zacks Consensus Estimate for 2025 earnings is currently pegged at $3.10 per share.

Our Take on Alcon’s Q2 Results

Alcon ended the second quarter of 2025 with earnings beating and revenues missing estimates. Throughout the first half of the year, the company continued to face a relatively soft surgical market. The contraction of both margins in the quarter is also discouraging.

On a promising note, Alcon is seeing encouraging early demand for its recent products, including Unity VCS, Voyager, PanOptix Pro, Precision7, Systane Pro PF and Tryptyr. These introductions position the company to accelerate top-line growth, generate cash and deliver long-term value for its shareholders. Alcon recently announced a definitive merger agreement to acquire STAAR Surgical, which is set to expand its presence in myopia correction. The company also announced the acquisition of LumiThera and its Valeda Light Delivery System for early and intermediate dry age-related macular degeneration.

ALC’s Zacks Rank & Key Picks

Alcon currently carries a Zacks Rank #4 (Sell).

Some better-ranked stocks from the broader medical space are Medpace Holdings MEDP, GeneDx Holdings WGS and Boston Scientific BSX.

Medpace Holdings, currently sporting a Zacks Rank #1 (Strong Buy), reported a second-quarter 2025 EPS of $3.1, which beat the Zacks Consensus Estimate by 3.33%. Revenues of $603.3 million topped the consensus mark by 11.48%. You can see the complete list of today’s Zacks #1 Rank stocks here.

MEDP has a historical five-year earnings growth rate of 30.9% compared with the S&P 500 composite’s 10.1% growth. The company surpassed earnings estimates in each of the trailing four quarters, with the average surprise being 13.87%.

GeneDx Holdings, carrying a Zacks Rank #2 (Buy) at present, posted a second-quarter 2025 adjusted EPS of 50 cents, exceeding the Zacks Consensus Estimate by a remarkable 400%. Revenues of $102.7 million surpassed the Zacks Consensus Estimate by 21.24%.

WGS has an estimated earnings growth rate of 79.6% for 2026 compared with the industry’s 18.6% growth. The company’s earnings outpaced estimates in each of the trailing four quarters, the average surprise being 231.40%.

Boston Scientific, currently carrying a Zacks Rank #2, reported a second-quarter 2025 adjusted EPS of 75 cents, which topped the Zacks Consensus Estimate by 4.2%.

BSX has a historical five-year earnings growth rate of 13.3% compared with the industry’s 2.7% growth. The company’s earnings beat estimates in each of the trailing four quarters, with the average surprise being 8.11%.

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This article originally published on Zacks Investment Research (zacks.com).

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