AstraZeneca's Q1 Profit Falls 11% Despite Strong Diabetes Drug Growth

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. 

Read/Post Comments (0) | Recommend This Article (0)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2927632, ~/Articles/ArticleHandler.aspx, 8/31/2015 6:02:56 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Sean Williams

A Fool since 2010, and a graduate from UC San Diego with a B.A. in Economics, Sean specializes in the healthcare sector and in investment planning topics. You'll usually find him writing about Obamacare, marijuana, developing drugs, diagnostics, and medical devices, Social Security, taxes, or any number of other macroeconomic issues.

Today's Market

updated Moments ago Sponsored by:
DOW 16,528.03 -114.98 -0.69%
S&P 500 1,972.18 -16.69 -0.84%
NASD 4,776.51 -51.82 -1.07%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

8/31/2015 4:05 PM
AZN $31.28 Down -0.39 -1.23%
AstraZeneca plc (A… CAPS Rating: ****
BMY $59.47 Down -1.14 -1.88%
Bristol-Myers Squi… CAPS Rating: ****