|
 |
Apr-24-2008AstraZeneca's first-quarter profit falls 3%(topic overview)
CONTENTS:
- Core operating profit rose 21% to $2.77 billion for the quarter from $2.27 billion last year, as a result of improvement in core gross margin and continued efficiencies in SG&A; and R&D.; Core earnings per share reached $1.28, a rise from $1.07 in the first quarter of 2007, as a result of the growth in core operating profit and the benefit of a lower number of shares outstanding. (More...)
- Pharmaceutical giant AstraZeneca unveiled a fall in first-quarter profits as its best-selling drugs came under pressure from generic rivals. (More...)
- Analysts' median forecasts were for sales of $US7.83 billion and core earnings of $US1.22 in a Reuters poll. (More...)
- Crestor rose 22 percent to $772 million, slightly less than analysts' expectations. (More...)
- Net income decreased 3.7 percent to $1.50 billion, the London-based drugmaker said today. (More...)
- "I'm disappointed in the sales figures, especially Crestor,'' analyst Beatrice Muzard of Natixis Securities in Paris, who rates the shares "reduce,'' said in a telephone interview. (More...)
- The stock had fallen 3.8 per cent to '20.52 in a weak London stock market by 1030 GMT. (More...)
- The stock trades on around 9.2 times forecast 2009 earnings, a discount to British rival GlaxoSmithKline Plc on 10.8 times, according to Reuters data. (More...)
SOURCES
FIND OUT MORE ON THIS SUBJECT
Core operating profit rose 21% to $2.77 billion for the quarter from $2.27 billion last year, as a result of improvement in core gross margin and continued efficiencies in SG&A; and R&D.; Core earnings per share reached $1.28, a rise from $1.07 in the first quarter of 2007, as a result of the growth in core operating profit and the benefit of a lower number of shares outstanding. [1] AstraZeneca's target range for core earnings per share was increased to between $4.45 and $4.75 to reflect the currency benefits realised in the first quarter relative to the currency assumptions upon which the targets were based, it said. Finance chief Simon Lowth pointed out that AstraZeneca was still on track to achieve its full-year targets. 'We've delivered performance that puts us on track to meet our targets for the year,' he said.[2] "There are still lots of moving parts.'' The U.K. company said core earnings per share will be $4.45 to $4.75 this year, more than previously forecast, because of currency benefits.[3]
S&P; equity analyst Sho Matsubara downgraded the shares to "hold" from "buy" to reflect the slowing momentum in the business. An increase of 19 percent in quarterly "core" earnings per share (EPS) was helped by a weak dollar, leading the group to increase its forecast for 2008 core EPS to between $4.45 and $4.75, against $4.40-4.70 anticipated previously.[4]
Increases of 10 percent in revenues and 19 percent in "core" earnings per share (EPS) were helped by a weak dollar and came despite slowing demand for ulcer pill Nexium, which left the overall sales figure short of expectations.[5] LONDON, April 24 (Reuters) - AstraZeneca Plc (nyse: AZN - news - people ) nudged up its forecast for 2008 earnings on Thursday, but sales of ulcer pill Nexium and other key drugs in the first quarter were weaker than hoped for, knocking its shares.[4] AstraZeneca shares fell 12 pence, or 0.6 percent, to close at 2,120 pence in London. The shares have lost almost a quarter of their value in the past year, making the stock the third-worst performing of the 13 companies in the Bloomberg Europe Pharmaceutical Index. "It's really dangerous to bet on this one, particularly after the rally we have had,'' Romain Pasche, head of global equity research at Vontobel Asset Management in Zurich who manages about $800 million in drug stocks, said today in an interview on Bloomberg Television before the earnings were released.[3] The results were below market expectations, and AstraZeneca shares fell 4.7 percent at midday on the London Stock Exchange to 2032 pence ($40.43).[6]
The company's shares were down 1.7 percent in London trading as of 2:20 p.m. London time. 'This was a good achievement in an increasingly challenging environment,' AstraZeneca Chief Financial Officer Simon Lowth said in a conference call. The company posted sales gains in its anti-psychotic drug Seroquel and cholesterol-fighter Crestor, its second- and third-biggest sellers, respectively. Sales of its top-selling drug, heartburn and ulcer treatment Nexium, tumbled 15 percent in the United States, AstraZeneca's biggest market.[7] In January, AstraZeneca reported that 2007 full-year profit was down 6.5 percent from restructuring costs and slowing sales of key drugs. The company said sales in the United States rose 5 percent in the first quarter as sales from its MedImmune subsidiary, acquired in June, more than offset the decline in sales of the hypertension and angina drug Toprol-XL because of generic competition.[6] Restructuring and synergy costs, Merck and MedImmune-related amortisation and an intangible asset impairment charge as a result of the 'at risk' launch of a generic competitor to MedImmune's oncology product Ethyol combined to bring down income in the quarter. The restructuring scheme has cost the company $1.08 billion (0.55 billion) so far, and AstraZeneca said it remains on track to deliver two-thirds of the total programme benefits of $1.4 billion (0.7 billion) per annum by the end of this year, with the full amount to be delivered by 2010.[8] Pretax profits were slightly down at $2.143 billion, hit by restructuring costs of $117 million, Merck & Co Inc and MedImmune related amortisation costs of $134 million, and an intangible asset impairment charge of $257 million as a result of the 'at risk' launch of a generic competitor to MedImmune's oncology product Ethyol.[2]
The company's core earnings ' which excludes restructuring costs and charges related to last year's acquisition of biotech company MedImmune ' rose 12 percent to $2.65 billion before taxes.[7] AstraZeneca also reported costs of $117 million for a restructuring program announced last year that is aimed at trimming 11 percent of the workforce by 2010, Lowth said. The drugmaker didn't report costs from a $215 million fine levied by a court in Alabama over prices it charged the state's Medicaid health insurance program for the poor because the company plans to appeal the ruling, he said.[3]
Finance expense for the quarter was $372 million, up from $150 million a year earlier. As part of its effort to enhance productivity, AstraZeneca undertook major restructuring in many of its European sales and marketing organizations in 2007. The company said that it remains on track to deliver two-thirds of the total programme benefits of $1.4 billion per annum by the end of this year, with the full amount to be delivered by 2010.[1] AstraZeneca's first quarter sales increased four per cent to $7.7 billion (3.89 billion), boosted by its acquisition of MedImmune.[8] Reported operating profit in the quarter rose 4 per cent to $US2.26 billion on sales of $US7.68 billion, equivalent to core EPS of $US1.28.[9] The UK's second largest pharmaceutical company said core operating profit was up 12 per cent to $2.77 billion ($1.4 billion) on margin improvements but operating profit after exceptional items was down five per cent from last year to $2.3 billion (1.16 billion).[8]
Profit attributable to equity holders of the company declined to $1.27 billion, or $0.86 per $0.25 ordinary share, from $1.43 billion, or $0.93 per $0.25 ordinary share, recorded in the same period of last year.[1]
Pharmaceutical giant AstraZeneca unveiled a fall in first-quarter profits as its best-selling drugs came under pressure from generic rivals. The Macclesfield-based group said sales of ulcer treatment Nexium had fallen 9% to 1.23 billion U.S. dollars (''623 million), before adding that it expected a "single digit" sales decline in the product this year. [10] Shares fell almost 5%. Astra also booked a further 117 million U.S. dollars (''59.2 million) in costs from its restructuring plans announced last summer, under which it aims to axe 7,600 jobs worldwide. Chief executive David Brennan pointed to a "growing pipeline" of new medicines - with three regulatory filings due this year - and insisted the firm was on track to meet its full-year targets. Other Astra products under pressure from generic copies included angina drug Toprol-XL, where sales slumped 60% to 190 million U.S. dollars (''96.1 million).[10]
Asthma inhaler Symbicort sales were 33 percent higher at $471 million after it was introduced in the U.S. in June and went head-to-head with GlaxoSmithKline Plc's Advair. GlaxoSmithKline Plc, the U.K.' s largest drugmaker, reported yesterday that first-quarter earnings declined 14 percent to 1.31 billion pounds ($2.59 billion) after safety concerns hurt the sales of its diabetes pill Avandia and older drugs faced increasing competition from generic copies.[3] Seroquel, AstraZeneca's schizophrenia drug, fared better, with sales rising by 10 percent to $1.050 billion. Cholesterol treatment Crestor saw its sales jump by 16 percent to $772 million.[11] However sales of the bipolar treatment Seroquel rose to $1.050 billion compared with $0.923 billion last time, and the statin Crestor saw sales rise to $772 million compared with $628 million last year.[2]
The Anglo/Swedish company reported sales of $7.677 billion, slightly below analysts' consensus expectations of $7.87 billion, but rose 10 percent from the $6.966 billion it reported last time. The sales loss was led by a fall in its lead product, the heartburn treatment Nexium, which fell to $1.238 billion from $1.308 billion last time.[2] Sales of the group's leading drug, heartburn treatment Nexium, fell by nine percent to $1.238 billion, compared with 1.308 billion previously.[11]
Sales of Nexium declined 5.4 percent to $1.24 billion from $1.31 billion a year earlier, AstraZeneca said. "It is true to say that the net prices on Nexium have declined and that has been the main driver,'' Lowth said in a telephone conference with reporters.[3] AstraZeneca posted first-quarter sales of $7.67 billion, up 10 percent from a year ago but less than what analysts were expecting.[7]
The drugmaker is relying on last year's $15.2 billion acquisition of U.S. biotechnology company MedImmune Inc. to help make up lost sales.[3] In the quarter, sales of antipsychotic Seroquel increased 14% to $1.05 billion from $923 million a year earlier.[1] First quarter sales rose to $7.68bn from $6.97bn last year, but that was still below expectations of about $7.87bn.[12] Lower sales of diabetes drug Avandia and stiffer generic competition knocked the group's first quarter profits, with a decline in earnings also still expected over the full year.[12] The London-based drug maker, with U.S. headquarters in Fairfax, posted a net profit of $1.5 billion, down 3.7 percent from the first quarter of 2007.[7] Core operating profit in the first quarter was up 12 percent to $2,765 million.[2]
The group revealed on Thursday that it booked $117 million in restructuring costs during the first quarter of 2008.[11]
Turnover totaled GBP 5.69 billion, up 2% from GBP 5.59 billion last year. Another peer, Merck & Co Inc (MRK) said its net income for the first quarter surged 94% to $3.30 billion from $1.70 billion in the previous year.[1] In the quarter, reported operating profit rose 4% to $2.26 billion from $2.17 billion in the previous year.[1] AstraZeneca reported fourth quarter profit of $1.28 billion, lower than $1.45 billion in the prior-year quarter.[1]
April 24 (Bloomberg) -- AstraZeneca Plc, the U.K.' s second- largest drugmaker, reported an unexpected decline in first- quarter profit as sales of ulcer treatment Nexium fell in the U.S. and western Europe.[3] AstraZeneca PLC reported mixed first-quarter results today, posting an increase in core earnings but lower-than-expected sales amid pricing pressure on its best-selling drug, Nexium.[7] LONDON -- AstraZeneca PLC Thursday reported improved underlying first-quarter earnings, helped by stronger sales of antipsychotic Seroquel and cholesterol drug Crestor, as well as favorable currency movements. The world's sixth-largest drug maker by prescription-drug sales also increased its.[13]
Schizophrenia drug Seroquel and cholesterol fighter Crestor showed double-digit per centage growth, but Nexium sales fell worldwide and tumbled 15 per cent in the key U.S. market, due to growing competition from cheaper rival products.[9] The Ranbaxy deal removes the immediate threat of generic Nexium, though ongoing litigation with other companies means cheap copies of the drug might still enter the U.S. market before the 2014 date agreed with the Indian group. AstraZeneca also faces a continuing legal fight over its patents on Seroquel. Its shares have fallen nearly 40 per cent since October 2006 but have rallied 19 per cent since hitting a 10-year low in mid-March.[9]
Lowth said the volume of Nexium sold in the U.S. was basically flat during the quarter, but the company had to cut prices for the drug in the face of competition from cheaper competitors. He said AstraZeneca expects a decline in worldwide sales of Nexium in the mid-single digits for 2008.[7] Sales of AstraZeneca's blockbuster heartburn and ulcer pill Nexium dropped to $1.24bn compared with $1.31bn the prior year and the group said it expects global Nexium sales to show a mid-single digit percentage decline in 2008.[12] Sales of Nexium, a drug approved for the treatment of gastroesophageal reflux disease and other conditions involving excessive stomach acid, declined 15% to $736 million in the U.S and 9% globally from last year, hurt by lower prices and distributors using up excess inventory.[1] Sales of anti-cholesterol drug Crestor rose 22% to $772 million from $628 million a year earlier.[1] Sales of the bipolar drug Seroquel rose to $1.05bn from $0.92bn last time, while sales of cholesterol treatment Crestor increased to $772m compared with $628m previously.[12]
Analysts' median forecasts were for sales of $US7.83 billion and core earnings of $US1.22 in a Reuters poll. [9] Earlier, the company expected full-year core earnings per share between $4.40 and $4.70, compared with $4.38 in 2007.[1] On a per share basis, earnings grew 95% to $1.52 from last year's earnings of $0.78.[1] Earnings, on a per share basis, rose to $1.03 from $1.02 on lower share count, but missed analysts' $1.19 per share estimate.[1]
LONDON (SHARECAST) - AstraZeneca upped its earnings forecast for 2008, but the drugmaker's shares took a hit as first-quarter sales missed expectations.[12] LONDON (Thomson Financial) - AstraZeneca's shares were off lows on Thursday afternoon after the UK's second-biggest drugmaker increased its full year EPS guidance but marginally missed sales expectations.[2]
'The first quarter performance puts us on track to achieve our full year financial targets,' said chief executive David Brennan. Fellow drugmaker Shire turned down despite a bright start this morning after the drug firm said late yesterday that the U.S. Food and Drug Administration approved its hyperactivity drug Vyvanse for the treatment of Attention Deficit Hyperactivity Disorder (ADHD) in adults.[12] According to the company, Crestor was the only statin drug to gain market share in the U.S in the first quarter.[1]
Net income included costs of $257 million, or 12 cents a share, for impairment of intangible assets from generic-drugmaker Sun Pharmaceutical Industries Ltd.' s decision to sell a version of MedImmune's cancer drug Ethyol before a patent infringement lawsuit is concluded.[3]
The company sold $5.2 billion worth of Nexium in 2007. For the full year, the company bumped up its earnings-per-share guidance by 5 cents to a range of $4.45 to $4.75, an increase prompted by a favorable currency exchange.[7] The London, UK-based company's first-quarter profit declined moderately to $1.51 billion from $1.56 billion a year ago.[1] Profit attributable to equity holders fell to $1.50 billion from $1.56 billion last year.[1] Profit fell from $1.56 billion, or $1.02, a year earlier, the drugmaker said.[3]
Profit before tax was $2.14 billion, down from $2.27 billion in the previous year quarter.[1]
Total turnover rose 10% to $7.68 billion from $7 billion in the prior year quarter.[1] Selling, general and administration expenses rose to $2.74 billion from $2.22 billion in the prior-year quarter.[1]
Sales jumped by 10.2 percent to $7.677 billion, but the group's major products enjoyed mixed fortunes.[11] Sales were $8.17 billion, up 14% from $7.15 billion in the year-ago quarter.[1]
Asthma inhaler Symbicort sales grew 33% to $471 million from $354 million in the previous year, after it was introduced in the U.S. and went nose-to-nose with GlaxoSmithKline Plc's (GSK) Advair.[1] Analysts were concerned by the fall-off in Nexium sales as Astra's overall 7.68 billion U.S. dollar (''3.88 billion) revenues also fell short of City hopes.[10] Nexium sales were hurt by lower prices and distributors using up excess inventory. AstraZeneca needs to boost revenue of its best-selling medicines to counter increasing competition from generic rivals and product-development failures.[3] Nexium is a key focus for analysts as sales have been slowing in the United States and the market has been impacted by fierce competition from generic drugmakers.[11]
Sales of the heartburn medication Nexium, the company's sales leader, were down 15 percent in the United States and 9 percent globally.[6] The company said it expects a mid-single digit sales decline for worldwide sales of Nexium for the full year.[1] For the full year, global Nexium sales are expected to show a mid-single digit per centage sales decline.[9]
The drugmaker expects a "mid-single digit decline'' in worldwide Nexium sales for 2008, Lowth said.[3]
Sales in western Europe were down 1 percent as volume rose slightly, AstraZeneca Chief Financial Officer Simon Lowth said in a telephone conference with analysts.[3] Total first-quarter sales rose 10 percent, short of the 12 percent or more that analysts had expected.[4]
Sales in emerging markets including China rose 11 percent, the company said.[6] Sales of the anti-cholesterol drug Crestor, the company's No. 2 drug, were up 16 percent.[6]
'The top line looks to be light, Nexium especially, and that then really flowed through the P&L; account. 'Obviously top line is important for drug stocks but it's not as though it's a a massive miss,' he said. Crestor is expected to see a boost in its earnings outlook after the company announced in March the JUPITER trial had been halted early because of an 'unequivocally' positive result, opening the way for the drug to be used preventatively.[2] AstraZeneca itself has had a torrid time in the past two years following the failure of key experimental medicines in late-stage development and the poorly received acquisition of MedImmune last year. Its fortunes have recently improved, with a settlement of a U.S. patent dispute over Nexium with Ranbaxy Laboratories last week and recent surprisingly good clinical trial results for Crestor.[5]
The group said the fall in revenues had been offset by the inclusion of sales from vaccines business MedImmune, which it bought last year.[10]
Among competitors, pharmaceutical and healthcare company GlaxoSmithKline Plc (GSK, GSK.L) yesterday reported first-quarter profit of GBP 1.4 billion, down from GBP 1.53 billion in the same period of last year.[1] The company said profit in the three months ending March 31 was 1.503 billion pounds ($2.99 billion), compared with 1.56 billion pounds in the same period of 2007.[6] Pre-tax profits declined by 5.5 percent to $2.143 billion in the three months ending March 31st, compared with the equivalent period of 2007. That dashed market expectations of $2.23 billion.[11] Anglo-Swedish pharmaceuticals giant AstraZeneca said on Thursday that first-quarter net profits fell 3.7 percent to $1.503 amid restructuring.[11] AstraZeneca PLC reported a 3.7 percent drop in first-quarter profit on Thursday, but said it was on course to meet its full-year financial targets.[6]
Crestor rose 22 percent to $772 million, slightly less than analysts' expectations. [3] Seroquel gained 14 percent to $1.1 billion, below the increase analysts had estimated.[3] Eight analysts surveyed by Bloomberg had estimated earnings would rise to $1.58 billion.[3]
The results were slightly ahead of expectations, as a poll of 13 analysts' estimates provided by the company saw core EPS at $1.23 (62p).[8] The Anglo-Swedish group said currency factors meant it now expected core EPS of between $4.45 and $4.75, against $4.40-4.70 anticipated previously.[5]
Net income decreased 3.7 percent to $1.50 billion, the London-based drugmaker said today. [3] Astra added it was on track to deliver two-thirds of the planned 1.4 billion U.S. dollar (''708 million) in savings under the cost-cutting programme by the end of the year, with the full amount due by 2010.[10] The group has spent almost 1.1 billion U.S. dollars (''557 million) so far on the overhaul.[10] The group, which recently settled a patent dispute with an Indian firm over Nexium, also wrote off 257 million U.S. dollars (''130.1 million) over a potential generic threat to cancer treatment Ethyol.[10]
Overall pre-tax profits slipped 15% to 2.14 billion U.S. dollars (''1.08 billion) at constant exchange rates, lower than expected by the City.[10]
"I'm disappointed in the sales figures, especially Crestor,'' analyst Beatrice Muzard of Natixis Securities in Paris, who rates the shares "reduce,'' said in a telephone interview. [3] Sales of antipsychotic Seroquel and cholesterol-lowering medicine Crestor were less than analysts expected.[3]
"The sales trends of most of the leading products were below what most people expected," said Nomura Code analyst Paul Diggle.[9]
Global drugmakers have reported mixed results, reflecting rising generic competition, pricing pressure and product setbacks.[9] Faced with soaring costs and competition from generic groups, AstraZeneca unveiled plans in 2006 to slash 7,600 jobs by 2010.[11]
The stock had fallen 3.8 per cent to '20.52 in a weak London stock market by 1030 GMT. [9] The stock fell 4 percent to 20.46 pounds in a weak London stock market by 1135 GMT.[4]
The stock trades on around 9.2 times forecast 2009 earnings, a discount to British rival GlaxoSmithKline Plc on 10.8 times, according to Reuters data. [9]
SOURCES
1. AstraZeneca Q1 Profit Falls - Update [AZN] - RTTNews, Today's Top Stories, Global Newswires, ToDay's Top News,Global Business news .
2. ROUNDUP AstraZeneca off lows after Q1 sales miss hopes, ups FY EPS guidance - Forbes.com
3. Bloomberg.com: Worldwide
4. AstraZeneca Q1 sales fall short as Nexium tumbles - Forbes.com
5. AstraZeneca Raises Guidance, Quarterly Sales Light - Companies * Europe * News * Story - MSNBC.com
6. AstraZeneca 1Q profit down 3.7 percent, missing expectations
7. Pricing pressure on Nexium hurts AstraZeneca sales | delawareonline | The News Journal
8. AstraZeneca first quarter beats forecasts
9. Business Spectator - AstraZeneca nudges up guidance, but Q1 sales light
10. The Press Association: Astra profits hit by rival products
11. The Local - AstraZeneca says profits slid in first quarter
12. ShareCast - News you can use
13. Free Preview - WSJ.com
GENERATE A MULTI-SOURCE SUMMARY ON THIS SUBJECT:
Please WAIT 10-20 sec for the new window to open...
You might want to EDIT the default search query below:
Get more info on AstraZeneca's first-quarter profit falls 3% by using the iResearch Reporter tool from Power Text Solutions.
 |
|  |
|
