8th Feb 2024 10:51
(Alliance News) - Shares in AstraZeneca PLC on Thursday fell after fourth quarter results fell short of expectations although analysts believe the long-term outlook remains promising.
The Cambridge, England-based pharmaceutical company said in the fourth quarter ending December, revenue increased to USD12.02 billion from USD11.21 billion the year before, up 7% on an actual basis, and 8% at constant currency.
Pretax profit climbed 15% or 18% at constant currency to USD897 million from USD778 million the year prior, while reported earnings per share rose 7% to USD0.62 from USD0.58.
Oncology sales rose 23% to USD4.50 billion in the quarter with a strong performance across all key medicines and regions.
Cardiovascular, Renal and Metabolism sales increased 18% to USD2.70 billion with Farxiga sales up 36%, Lokelma up 38%, roxadustat up 27% while Brilinta declined 5%.
Shore Capital analyst Sean Conroy said while revenue was in line with consensus expectations, core EPS was 3% behind forecasts.
Oncology sales were 1% behind estimates, with Tagrisso missing by around 4%, he said.
Core operating income came in well behind expectations, he noted, 14% below forecast, with both research and development, and selling, general and administrative expense higher than expected in the quarter.
Derren Nathan, head of equity research at Hargreaves Lansdown, accepted there have been some disappointment in clinical results, but said given the quality of the pipeline, and solid outlook, "the mid-teen earnings multiple doesn’t look too demanding".
He pointed out with three new medicines approved since the third quarter, "it's not resting on its laurels."
"The research & development conveyor belt is running at full tilt with 27 phase 3 trials in progress across 18 medicines," he noted.
He thinks Chief Executive Pascal Soriot is "laying strong foundations for sustainable long-term growth."
Shore Capital's Conroy is also positive on the company, reiterating a 'buy' rating and 13,000 pence share price target.
"We continue to believe a premium is warranted based on its earnings growth and pipeline prospects," he said.
Shares in AstraZeneca fell 4.6% to 10,010.00 pence in London on Thursday morning.
By Jeremy Cutler, Alliance News reporter
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