AstraZeneca (AZN) Misses Q3 Earnings, Tweaks 2017 EPS View -

AstraZeneca (AZN) Misses Q3 Earnings, Tweaks 2017 EPS View

Nov 09, 2017Jeremy ParkinsonFinance0

AstraZeneca plc (AZN – Free Report) reported third-quarter 2017 core earnings of 56 cents per American Depositary Share (ADS), which missed the Zacks Consensus Estimate of 57 cents. Core earnings declined 17% year over year at constant exchange rates (CER). Lower product sales and gross margins and higher SG&A costs hurt profits in the quarter.

Total revenue rose 10% at CER to $6.23 billion in the reported quarter. Revenues also beat the Zacks Consensus Estimate of $5.75 billion. Revenues, however, gained mainly from the $997 million payment from Merck (MRK – Free Report) for the oncology collaboration the companies announced in July to jointly commercialize and develop Lynparza/selumetinib.

Meanwhile, product sales declined in the quarter due to generic competition facing some legacy products.

Key growth platforms (representing 66% of total revenues) were up 6% in the quarter at CER. Among the key growth platforms, Emerging Markets, New Cardiovascular & Metabolic Diseases (CVMD), New Oncology and Japan performed well in the quarter. However, Respiratory sales declined 2% in the reported quarter.

All growth rates mentioned below are on a year-over-year basis and at CER.

Product Sales Decline

Product sales declined 2% in the quarter to $4.88 billion due to lower sales in the United States as well as Europe, which offset strong performance in emerging markets and in China.

Crestor sales declined 14% to $580 million with sales in the United States and Europe down due to the entry of multiple generic versions of the drug in the market.

Seroquel XR sales declined 68% to $62 million due to competition from generic launches.

In the quarter, Onglyza sales declined 25% to $127 million due to competitive pressure in the DPP-4 class.

Symbicort sales were down 4% in the quarter to $668 million due to lower sales in the United States and Europe. U.S. sales declined in the due to continued pricing pressure from managed-care access within the ICS/LABA class and also competition from other class like LAMA/LABA combination medicines.