Pharmaceutical giant AstraZeneca (AZN) beat forecasts on Thursday after reporting full year revenues and profit around 5% ahead of expectations.
Astra shares rose 3% to £86.42 on Thursday (10 February 2022).
Product sales grew 38% in constant currencies to $36.54 billion and core earnings per share jumped 37% to $5.29, compared with market expectations of $4.97.
The stand-out performance came from the cancer franchise, which saw year-on-year growth of 17% to $13.66 billion. Total Covid-19 revenues were $4.11 billion, representing just over a tenth of total revenues.
Impairment and restructuring charges in relation to the rare diseases Alexion acquisition clobbered reported profit which fell to a loss of $265 million compared with a profit of $3.92 billion in 2020.
While the extra costs are short term hits to performance, the impairments effectively make the $39.4 billion Alexion acquisition less attractive than initially thought and may justify investor cynicism over the deal.
OPTIMISING GROUP STRUCTURE
AstraZeneca initiated a groupwide review following the Alexion acquisition aimed at integrating systems, structures and processes.
The result is that the company is expected to incur $2.1 billion of one-off costs, of which $1.2 billion are cash charges as well as extra capital investments of $0.2 billion.
These actions are expected to release run-rate pre-tax benefits before reinvestment of around $1.2 billion including previously announced Alexion synergies by the end of 2025.
At the time of the acquisition AstraZeneca said it had identified $500 million of annual synergies against an upfront cash cost of $600 million.
POSITIVE GUIDANCE
The company guided for 2022 revenues to grow by a mid-teens percentage and core profit to increase by a mid-to-high twenties percentage. This includes a full year contribution from the firm’s Covid-19 vaccine.
Analysts have already penciled in 19% growth in revenues and a 34% increase in earnings for 2022, suggesting expectations are ahead of guidance.
In line with the positive outlook the company increased the annual dividend by $0.20 to $2.90 per share.
