Sanofi (NYSE:SNY) Profit Plunges 74.2% on Impairment, Restructuring Charges

Sanofi (NYSE:SNY) Profit Plunges 74.2% on Impairment, Restructuring Charges

Sanofi SA (NYSE:SNY) disclosed that its net earnings plunged 75.1% in the fourth quarter, hurt by impairment of intangible assets, as well as restructuring costs. Its business earnings per share also dipped 5.8% in the December quarter. Though the company’s net sales advanced modestly by 1.8%, its revenue from diabetes witnessed a 12.6% drop. For the year 2016, the drug maker sees its business earnings as broadly stable barring any unexpected events.

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Q4 Results

Sanofi reported net income of Euro €334 million is down down 75.1% from €1.24 billion in last year’s Q4. Its earnings per share also plunged to €0.26 from €1.02 in the same period. The company’s net income, excluding its Animal Health unit, also plummeted 60.1% to€553 million from €1.39 billion while earnings per share dropped to €0.41 from €1.03.

The drug maker’s net sales however did rise 1.8% to €8.72 billion from €8.565 billion in the previous Q4 on a constant currency basis.

Diabetes Revenue Drops

Sanofi said that its revenue from diabetes fell 12.6% to €1.903 billion while revenue from Genzyme increased 28.2% to €1.01 billion. Overall, pharmaceuticals recorded a 4.7% drop in revenue while Vaccines and Animal Health segments recorded 15.0% and 5.9% YoY growth respectively. The drug firm said that currency had a favorable impact of 3.9 percentage points due to US dollar strength against the euro.

Sanofi CEO Olivier Brandicourt, said that the company has made significant progress in respect of key launches and multiple businesses development activities apart from efforts to simplify the organization. He said that the exclusive negotiations with Boehringer Ingelheim give it a leadership position in consumer health care and termed it as a first step in repositioning its portfolio. He promised to continue to allocate resources to the encouraging late-stage pipeline, as well as the launch of innovative medicines.