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Earnings Fall at Astra Zeneca
Thursday, 26 April 2012
Pharmaceutical giant AstraZeneca reported a profit before tax of $
2.053 million, representing approximately Skr14 billion, for the first
quarter of 2012. This compares with profit of $ 3.288 million a year
Sales totalled $ 7.349 million, compared with $ 8.292 million a year earlier.
Astra Zeneca announced in the first quarter report that President and
CEO David Brennan has decided to resign. He leaves the company on 1
June, when he emerges from the board.
The Chief Financial Officer Simon Lowth has been appointed acting CEO.
In addition, former Volvo chief Leif Johansson succeeds Louis
Schweitzer as Chairman on 1 June - three months earlier than what had
been said before.
"It will allow Leif Johansson lead the selection process for David
Brennan's successor, which includes both internal and external
candidates," writes Astra Zeneca.
A summary from the company in a press release goes as follows
Revenue for the first quarter was $7,349 million, down 11 percent at constant exchange rates (CER).
• Loss of exclusivity on several key brands accounted for 8
percentage points of the revenue decline, which included the
recognition of a $223 million returns reserve against US trade
inventories of Seroquel IR following generic launches at the end of
• Emerging Markets revenue increased by 1 percent at CER, reflecting
the quarterly phasing that the Company anticipated. Company anticipates
a rebound in the remaining three quarters, but achieving double-digit
growth for the full year may be a challenge.
• Core EPS was $1.81 in the first quarter, a 19 percent decline at
CER compared with the first quarter last year, which benefited by $0.46
from two one-off gains. Excluding these gains, Core EPS would have
increased by 2 percent compared with last year.
• Core gross margin in the first quarter 2011 included a $131
million benefit ($0.07 per share) from settlement of patent disputes
with PDL BioPharma, Inc.
• Core EPS in the first quarter 2011 benefited by $0.39 as a result
of agreements reached between the UK and US governments over certain
• The third phase of the restructuring programme is being
implemented with pace, reflected in the $702 million in restructuring
costs taken in the first quarter. Reported EPS was down 39 percent at
CER to $1.28.
• Decline in Reported EPS is significantly larger than the decline
in Core EPS, largely the result of restructuring costs that were $0.37
higher than the first quarter 2011. Net cash distributions to
shareholders in the first quarter were $3,417 million, through dividend
payments of $2,505 million and net share repurchases of $912 million.
Core EPS target range for the full year lowered to $5.85 to $6.15.
David Brennan, Chief Executive Officer, commenting on the results,
said: “The anticipated impact from the loss of exclusivity on several
brands, together with challenging market conditions, has made for a
difficult start to the year in revenue terms. Delivery on our
restructuring plans and continued discipline on operating costs,
together with the benefits from a lower tax rate, will only partially
mitigate the revenue pressures. As a result we have lowered our Core
EPS target for the full year to the range of $5.85 to $6.15.”
By Scancomark.se Team
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