AstraZeneca plc (NYSE:AZN) posted a downbeat earnings forecast for the current year blaming the loss of exclusivity for its Crestor drug in America beginning in May this year. The company’s earnings for the fourth quarter also fell shy of expectations by a penny. The stock is down over 6% today.
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Outlook For 2016
AstraZeneca said that it expects its CER to be in the low to mid-single-digit percentage range with concurrent falls in its core earnings per share and total 2016 revenue. It included dilutive impacts from the recent transactions involving ZS Pharma and Acerta Pharma revealed last year. The loss of exclusivity for Crestor will hurt its sales in the later part of the current year. However, the company says external revenue will top last year’s.
The pharmaceutical company indicated that it was in line with its long-term business plan. AstraZeneca does not expect R&D expenses to be more than last year’s spending levels. However, it has committed itself to slash its selling, general, and administrative expenses in the current fiscal year.
Core Up 22%
AstraZeneca said that its core earnings grew 22% in the fourth quarter to 94 cents a share, which was one cent lower than Street expectations. On a GAAP basis, earnings were 63 cents a share. Its core operating profit jumped 28% to $1.56 billion. Total revenue advanced 2% on a CER basis to $6.4 billion. On an actual basis, revenue dipped 5%. Its selling, general and administration costs dipped 11% in line with its commitment at cost cutting.
AstraZeneca also reiterated its commitment towards the progressive dividend policy. The company announced a second interim dividend of $1.90 a share. That takes the total dividend to $2.80 a share for the full year.