Shares of AstraZeneca (AZN -0.78%) were sliding 3.2% lower as of 10:57 a.m. ET on Thursday. The decline came after the British drugmaker announced its second-quarter results.
AstraZeneca reported total revenue in Q2 of $12.9 billion, up 13% year over year. This result topped the average analysts' revenue estimate of $12.6 billion.
The company posted earnings per share (EPS) of $1.24, a 6% year-over-year increase. Its core EPS, which excludes costs related to the amortization of intangibles, impairments, legal settlements, and restructuring charges, fell 8% to $1.98. Both earnings figures beat the average analysts' EPS estimate of $1.20.
AstraZeneca also raised its full-year outlook. The big pharma company expects revenue and core EPS to increase by a percentage in the mid-teens compared to its previous forecast of growth in the low double digits.
What didn't investors like about AstraZeneca's Q2 update?
With revenue and earnings beats along with more optimistic guidance, you'd expect AstraZeneca's share price to rise instead of fall. What didn't investors like about the company's Q2 update that caused the pharma stock to decline?
Sometimes the official Wall Street estimates aren't what the broader investment community anticipates. AstraZeneca seems to have fallen short of the so-called "whisper number" with its Q2 earnings result.
Is AstraZeneca stock a buy?
I think the reaction to AstraZeneca's Q2 update was overblown. However, I'm not convinced the stock is a great pick. Several pharma stocks offer better growth prospects, more attractive valuations, and higher dividend yields than AstraZeneca does.
