New AstraZeneca CEO sees big profit and sales fall

Thu Jan 31, 2013 3:58am EST
 

By Ben Hirschler

LONDON (Reuters) - AstraZeneca's (AZN.L: Quote) new boss said the drugmaker faced a tough year, with sales expected to fall by a mid-to-high single digit percentage rate as patent expiries continued to erode business.

Earnings will decline "significantly more than revenue" this year as operating costs rise, Britain's second biggest drugmaker said on Thursday.

The outlook was worse than the decline of around 3 percent in 2013 sales that analysts had been expecting, and shares in the group fell 4.1 percent by 0840 GMT.

Brokerage Jefferies said a decision not to increase the dividend for the second half of 2012 was also disappointing.

Chief executive Pascal Soriot hopes eventually to turn the group around by investing in existing growth areas such as emerging markets, diabetes care and new heart drug Brilinta.

Soriot, who joined from Roche (ROG.VX: Quote) in October, is also weighing the case for acquisitions. He will set out his strategy in detail during a keenly awaited investor day on March 21.

In a bid to clear the decks and give himself a free hand, Soriot said he had withdrawn mid-term planning assumptions for profit margin and revenue set by previous management.

Fourth-quarter sales fell 16 percent to $7.28 billion, generating core earnings, which exclude certain items, down 3 percent at $1.56 per share. The slower decline in earnings reflected lower costs and a favorable tax adjustment.   Continued...