Novartis AG NVS is scheduled to report first-quarter 2016 results on Apr 21.Novartis’ track record has been mixed with the company beating estimates in two of the last four quarters. In the last reported quarter, however, the company recorded a negative earnings surprise of 9.02%.Overall, the company has posted an average positive earnings surprise of 2.92% for the past four quarters. Let’s see how things are shaping up for this announcement.Factors to Impact Q1 Results2016 is expected to be a transformational year for Novartis. The company’s ophthalmologic division, Alcon, was facing challenging conditions due to a decline in surgical equipment sales in the U.S. and emerging markets as well as intensifying generic competition in the country for Ophthalmic Pharmaceuticals.In a bid to revamp its beleaguered Alcon business, Novartis announced that its ophthalmic pharmaceuticals business will be moved to the pharmaceuticals division. Consequently, the Alcon division will focus solely on the surgical and vision care businesses. The restructuring plan for Alcon is expected to result in savings of $1 billion through 2020.Novartis is also expected to face headwinds in the form of generic competition for some products as well as negative currency movement. In fact, unfavorable movement in foreign exchange rates is estimated to impact sales by 5% in the first quarter of 2016 and 3% in the full year. Novartis expects net sales in 2016 to be broadly in line with 2015 levels. Generic competition is estimated to impact sales to the tune of $3.2 billion as compared with $2.2 billion in 2015. On the other hand, Lucentis is expected to face challenges from Avastin, along with pricing pressure. Loss of patent protection for some key drugs, including Diovan and Exforge, in Novartis’ portfolio will also impact results. Gleevec was slated to lose patent protection in February in the U.S. and in December in the EU.Meanwhile, emerging markets such as China, Russia, Brazil and India are showing signs of slowing down.On a positive note, Sandoz, Novartis’ generic arm, continues to strengthen its biosimilars portfolio and pipeline, which should offset the weakness in the Alcon segment. The European Medicines Agency accepted Sandoz’s Marketing Authorisation Application for its biosimilar version of Pfizer Inc.’s PFE blockbuster drug, Enbrel. Earlier, the FDA accepted Sandoz’ Biologics License Application for its proposed biosimilar of Neulasta. Moreover, Novartis’ immuno-oncology portfolio continues to gain traction.Meanwhile, investor focus should remain on the sales ramp up of newly launched drugs (20 approvals in 2015), Entresto, Glatopa and Cosentyx, and the new oncology assets and cross-divisional synergies. A label expansion of Cosentyx should also boost results in the to-be-reported quarter.Earnings WhispersOur proven model does not conclusively show that Novartis is likely to beat estimates in the fourth quarter. That is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), #2 (Buy) or #3 (Hold) for this to happen. Unfortunately, that is not the case here, as elaborated below.Zacks ESP: The Earnings ESP, which represents the difference between the Most Accurate estimate and the Zacks Consensus Estimate, is -6.40%.Zacks Rank: Novartis carries a Zacks Rank #3. Though this increases the predictive power of the ESP, the company’s negative ESP makes surprise prediction difficult.Note that we caution against stocks with a Zacks Rank #4 or 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions.Stocks to ConsiderHere are a couple of health care stocks that you may want to consider, as our model shows that it has the right combination of elements to post an earnings beat this quarter:Johnson & Johnson JNJ has an Earnings ESP of +1.22% and a Zacks Rank #2. The company is scheduled to report first-quarter results on Apr 19.The Earnings ESP for Sanofi SNY is +4.17% and it carries a Zacks Rank #2. The company is scheduled to release results on Apr 29. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report SANOFI-AVENTIS (SNY): Free Stock Analysis Report PFIZER INC (PFE): Free Stock Analysis Report NOVARTIS AG-ADR (NVS): Free Stock Analysis Report JOHNSON & JOHNS (JNJ): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research