- Quarterly sales and earnings beat consensus
- Group raises full-year earnings guidance
- Currency headwinds seen increasing
Pharmaceutical giant AstraZeneca (AZN) delivered better than expected third quarter sales and profit growth prompting management to increase its full year earnings guidance.
The shares added 2% to £110.64, extending the recent strong run which has seen the stock price gain 15% over the last month.
Revenues jumped 19% excluding foreign exchange impacts to $10.9 billion in the quarter which means they are up 37% to $33.1 billion year-to-date.
Every business area contributed to growth with the cancer franchise (35% of total revenues) the stand-out performer showing growth of 24% over the nine months to 30 September.
Core operating profit margins increased six percentage points to 33% benefiting from favourable phasing and product mix (lower Covid-19 sales) while core earnings per share increased 52% to $5.28.
INCREASED GUIDANCE
Chief executive Pascal Soriot commented: ‘After a strong performance in the year to date, we have increased our core earnings per share guidance for the full year 2022.
‘Additionally, recent encouraging data for several of our pipeline programmes have given us the confidence to proceed with additional late-stage clinical trials as we maintain our focus on delivery of our growth ambitions.’
Astra now expects core earnings per share in constant currencies to increase by a high twenties-to-low thirties percent, up from a mid-to-high-twenties percent.
However, reported earnings are now expected to be impacted by a stronger currency headwind due to the continued strength of the dollar.
Revenues are expected to be impacted by a mid-single digit percentage currency headwind while the company maintained full-year guidance for a low-twenties percentage increase.
The consensus expectation is for reported revenues to grow 17% to around $44 billion according to Refinitiv data.
EXPERT VIEW
Shore Capital analyst Susie Jana reiterated her positive view on the shares and believes they should trade at a premium valuation to the sector rather than in line with the average.
Jana commented: ‘We believe a premium can be justified given the firm's industry-leading earnings growth and pipeline prospects that provide our conviction Astra can sustain growth longer-term’.
