New AstraZeneca CEO plans to invest through tough year
By Ben Hirschler
LONDON (Reuters) - AstraZeneca's (AZN.L: Quote) new boss said sales and profits would both fall sharply in 2013 as the drugmaker struggles to turn itself around by investing more in-house and on potential acquisitions.
Chief Executive Pascal Soriot forecast a mid-to-high single digit percentage fall in revenue this year, as patent expiries continue to erode business, with earnings declining "significantly more" due to increased operating costs.
The 2013 outlook was worse than the fall of around 3 percent in sales that analysts had been expecting, and shares in the group slumped 5.4 percent by 6:50 a.m. ET on Thursday.
A decision to keep share buybacks on hold and not increase the dividend for the first time in a decade added to the market's disappointment.
Soriot also withdrew mid-term planning assumptions for profit margin and revenue that had been set by previous management, increasing his freedom to pursue a strategy of investing for future growth.
Analysts at Citigroup said he appeared to be setting the scene for doing new deals - something the market has speculated about intensely in recent months.
"We will be open to more disruptive acquisitions, larger acquisitions if they make sense," Soriot told reporters.
But he added: "You have to consider the likelihood of that is lower because I don't think we need a large-scale acquisition to succeed." Continued...