AstraZeneca (AZN) Tops Q4 EPS by 6c; Issues FY16 Outlook, Expected FX Impact

AstraZeneca (NYSE: AZN) reported Q4 EPS of $0.94, $0.06 better than the analyst estimate of $0.88. Revenue for the quarter came in at $6.4 billion versus the consensus estimate of $6.27 billion.

Pascal Soriot, Chief Executive Officer, commenting on the results said: “We delivered a strong pipeline and financial performance in 2015 as we begin the next phase in our strategic journey. The Growth Platforms delivered an 11% rise in Product Sales that, along with the 7% increase in Core EPS, demonstrated the underlying strength of our business. Our culture of innovation continued to drive R&D productivity, with six regulatory approvals in the year. This momentum will continue in 2016 as we anticipate six regulatory submissions and around ten major data readouts. We strengthened the strategic importance of Oncology, bringing to patients next-generation therapies such as Tagrisso in lung cancer and Lynparza in ovarian cancer, as well as a promising immuno-oncology pipeline. Alongside this organic progress, we also continued to invest in our main therapy areas through key agreements with Acerta Pharma, ZS Pharma, and Takeda.

"As we face the transitional period of patent expiry for Crestor in the US, we’re confident that our strong execution on strategy, combined with the benefits of focused investments and new launches, keeps us on track to return to sustainable growth in line with our targets.”

FY 2016 Guidance
(All guidance is shown at CER.)

• Total Revenue - A low to mid single-digit percentage decline
• Core Earnings PerShare - A low to mid single-digit percentage decline

The above guidance incorporates the dilutive effects arising from the Acerta Pharma and ZS Pharma transactions announced in 2015.
The guidance also assumes the loss of exclusivity for Crestor in the US from May 2016. Externalisation Revenue is expected to be ahead of that in FY 2015, including an increasing element of recurring income arising from prior agreements. This is in line with the Company’s long-term business model. Core R&D costs are expected to be at a similar level to FY 2015. The Company is also committed to materially reducing Core SG&A costs in FY 2016. These measures are based on constant exchange rates.

Currency Impact

The weakness of key trading currencies against the US dollar has continued. Based on average exchange rates in January 2016 and the Company’s published currency sensitivities, an adverse impact of around 3% from currency movements on Total Revenue and Core EPS in FY 2016 would be anticipated. Further details on currency sensitivities are contained within the Operating and Financial Review.

For earnings history and earnings-related data on AstraZeneca (AZN) click here.

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