Net sales rose 16 percent to $58.6 billion and operating income fell five percent to $11 billion.
The company noted an exceptional charge of $1.9 billion for the year.
In its outlook for 2012 Novartis said it expected sales to be in line with 2011 "despite Diovan patent expiry and Tekturna/Rasilez decline."
Core operating income margin in constant currencies was expected to be slightly below the 2011 figure of 27.2 percent, the group said.
In the fourth quarter of last year operating income dropped 47 percent to
$1.2 billion due to net exceptional charges totalling $1.5 billion.
Net sales for this period increased 4.1 percent to $14.7 billion.
"Novartis achieved solid sales growth and strong operating leverage in the fourth quarter and for the year as a whole," said Novartis CEO Joseph Jimenez in a statement.
Jimenez said the company had achieved 15 key approvals this year and improved core margins through targeted productivity initiatives.
"However, we experienced some disappointments in the fourth quarter, with Tekturna/Rasilez and with the need to improve our quality standards at some manufacturing sites," he added.
At the beginning of January Novartis announced it was to axe almost 2,000 posts in the US following the expiry of its patent for leading hypertension drug Diovan.
The Basel-based company previously cut a similar number of jobs in late October, mainly in Switzerland and the US.