AstraZeneca Raises Guidance After Results Beat Market Expectations — Update

By Helena Smolak

AstraZeneca raised its full-year guidance after second-quarter revenue and core earnings beat analysts' expectations, becoming the latest big pharmaceutical company to lift its outlook.

The Anglo-Swedish pharmaceutical company joined Swiss peer Roche Holding and France's Sanofi in increasing forecasts for 2024 alongside their latest results. Before the trio of upgrades on Thursday, Novartis also raised its earnings guidance last week.

AstraZeneca said strong revenue in the first half and continued demand for its drugs supported its guidance upgrade. It now expects core earnings per share and total revenue to both grow by a mid-teen percentage at constant currencies. It had previously expected growth in the low double-digit to low teen range.

The guidance lift doesn't include an increase in collaboration revenue, which the company previously expected to have a substantial increase, AstraZeneca said.

A high level of innovations is driving financial strength across the industry that is likely to last until the next decade, Intron Health analyst Naresh Chouhan said.

For the second quarter, AstraZeneca said core EPS--the company's preferred metric, which strips out exceptional and other one-off items--fell to $1.98 from $2.15 in the prior-year period, when it posted one-off gains for its respiratory portfolio. Research-and-development expenses climbed by 13% in the second quarter as the largest London-listed company by market capitalization continues to invest in its pipeline.

Revenue for the quarter rose to $12.94 billion from $11.42 billion, driven by 18% sales growth at constant currencies in its product business. In its oncology segment--the drugmaker's top business--revenue grew 15% to $5.33 billion, accelerated by demand for its drugs Enhertu, Imfinzi and Tagrisso. Sales of all its therapy areas grew double-digit except its vaccine segment driven by lower collaboration revenue from Covid-19.

Analysts had expected core EPS at $1.95 on sales of $12.7 billion, according to a company-compiled consensus.

Sales of Enhertu rose 49% at constant currency, recording the fastest growth of AstraZeneca's oncology portfolio. Sales of its Type 2 diabetes drug Farxiga grew 32% at constant currencies.

The company lifted its interim dividend by 7 cents to $1.00.

At 0859 GMT, shares of AstraZeneca were down 3.6% at GBP117.80. The stock has gained 11% year to date.

Write to Helena Smolak at helena.smolak@wsj.com

(END) Dow Jones Newswires

July 25, 2024 05:17 ET (09:17 GMT)

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