Astra tops expectations

27th Jan 2011 07:04

Anglo-Swedish drugs firm AstraZeneca felt the pain of competition in the US from generic versions of its drugs last year, but this was offset by strong growth in other markets.Revenue for the full year was unchanged on a constant exchange rates (CER) basis at $33,629m, a shade above the $33.5bn predicted by stockbroker Charles Stanley.Core earnings per share (EPS) for 2010 rose by 5% on a CER basis to $6.71, versus expectations of $6.60. Reported EPS rose 7% (CER) to $5.60.The dividend has been increased by 11% from 2009's level to $2.55, versus Charles Stanley's expectation of a more generous $2.70.Looking at just the fourth quarter, revenue on a CER basis was down 3% to $8,617m, against a market consensus forecast of $8,316m.Outside of the US, revenues rose 7% on a CER basis, but the company lost more than $1.6bn of revenue in the States from generic competition on several products and the absence of H1N1 pandemic influenza vaccine revenue. Core earnings per share using constant exchange rates edged up 1% to $1.39, well above the market expectation of $1.31.Profit before tax slipped 2% on a CER basis to $2,737m, but was above finance house Matrix's forecast of $2.5bn. Full year pre-tax profit totalled $13,086m, up from $12,885m in 2009, and a 1% increase on a CER basis."Despite government pricing pressures and anticipated patent expiries in the US and Western Europe, our revenues remained in line with the previous year driven by excellent performance of our key brands and continued growth in Emerging Markets. This performance, combined with disciplined management of the business enabled us to deliver increased earnings, increase the dividend and return residual cash to shareholders through share repurchases." said chief executive officer David Brennan.Astra anticipates that revenue in 2011 could range from flat to a low-single digit decline compared with 2010 revenue on a constant currency basis, with the extent of generic competition among the variables that could determine actual performance within the range. Core pre-research & development operating margin is expected to be towards the top of the planning range of 48 to 54 percent of revenue, albeit somewhat lower than that achieved in 2010. Based on the January 2011 average exchange rates for its principal currencies, the target for core earnings per share is in the range of $6.45 to $6.75.Having bought back $2,210m of its shares in 2010 the company is targeting $4bn of share repurchases in 2011.