LONDON (Alliance News) - AstraZeneca PLC raised its full-year revenue and earnings guidance Thursday, despite seeing profit fall sharply in the half year to end-June.
The company now expects revenue for the full year to be in line with 2013 at constant currency, up from its previous guidance for a low-to-mid single digit percentage decline. Core earnings per share is expected to decrease in low double digits at constant currency, improved from previous guidance of a percentage decrease in the teens.
AstraZeneca recommended a first interim dividend of USD0.90, as part of its aim to set its first interim dividend at around a third of the previous full-year's dividend of USD2.80. It said the payout underpins its confidence in the execution of its strategy and its underlying performance.
The company has adopted a progressive dividend policy, it said. However, it said it will not make any share repurchases in 2014 so that it has flexibility to invest in its business.
The pharmaceutical giant posted a pretax profit of USD1.50 billion in the recent half year, down from USD2.39 billion in the same period a year before, as revenue rose to USD12.87 billion from UDS12.62 billion, although this was offset by higher cost of sales, selling, general and administrative costs.
This increase of costs was due to the inclusion of 100% of the costs associated with AstraZeneca's diabetes portfolio, and investment in growth drivers such as type 1 diabetes treatment Farxiga in the US, as well as continued targeted investment in emerging markets such as China.
Revenue rose 3% at constant currency, and 2% at actual currencies. Whilst the loss of exclusivity on some drugs continued to hit the company, this hit was reduced and was more than offset by AstraZeneca's growth drivers, it said.
The company said its pipeline had continued to grow during the half year, and now includes 114 projects, 100 of which are in the clinical phase of development. In the second quarter 19 projects progressed to their next phase; four projects were withdrawn.
On Wednesday, AstraZeneca said it had entered into an agreement to acquire Spanish pharmaceutical company Almirall SA's respiratory franchise for an initial USD875 million.
The deal could be worth up to USD1.22 billion including development-, launch- and sales-related milestones, AstraZeneca said, and it also has agreed to make sales-related payments to Almirall.
On Thursday the company reiterated that the deal offers "multiple benefits and long-term value" to its respiratory franchise, which it said is a key growth platform and an area of strategic priority. The acquisition is expected to add to earnings from 2016, it said.
"The quality of transformation we are seeing across all core areas of our business further underpins our confidence in AstraZeneca's longer term prospects," said Chief Executive Pascal Soriot in a statement.
By Hana Stewart-Smith; hanassmith@alliancenews.com; @HanaSSAllNews
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Astrazeneca (AZN)