Just days after rumors swirled about a possible takeover offer, global pharmaceutical giant AstraZeneca (NYSE:AZN) reported its first-quarter results very early this morning, delivering modest top-line growth but seeing its profits shrink notably.
For the quarter, AstraZeneca delivered revenue growth of just 0.5% to $6.42 billion, however this included a greater than 2% negative effect from unfavorable currency movements. Within the U.S., revenue jumped 3%, aided by an 8% improvement in Crestor sales as well as the full recognition of its diabetes franchise having completed the purchase of its previously unowned stake from Bristol-Myers Squibb (NYSE:BMY) in early February. Also notable were sales gains from Brilinta, Byetta, and Bydureon which improved 94%, 86%, and 196%, respectively, from the year-ago quarter.
On the flip side, AstraZeneca did note that patent expirations negatively affected revenue by roughly $150 million. This includes previous blockbuster Seroquel and Arimidex, whose revenue fell by double-digit percentages year-over-year.
Based on geographic breakdown, China, emerging markets, and the U.S. were AstraZeneca's bright spots with revenue rising 26%, 7%, and 3%, inclusive of negative currency effects, while established rest of world revenue (i.e., not the U.S. or Europe) dipped 11% and European revenue slipped 1%.
Despite delivering modest top-line growth, an 8% increase in selling, general, and administrative expenses and a 15% jump in cost of sales pressured AstraZeneca's profit for the quarter. In sum, the company reported $1.17 in core EPS, which was down 11% from the prior year in a constant exchange rate environment.
Looking ahead, AstraZeneca maintained its previously issued full-year guidance and announced in a research and development update that its pipeline now contains 104 ongoing projects, of which 90 are currently in the clinical phase of development.
Sean Williams has no material interest in any companies mentioned in this article. You can follow him on CAPS under the screen name TMFUltraLong, track every pick he makes under the screen name TrackUltraLong, and check him out on Twitter, where he goes by the handle @TMFUltraLong.
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