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Shire shines after shifting earnings guidance higher

Published: 12:28 24 Oct 2013 BST

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FTSE 100 pharmaceutical firm Shire (LON:SHP) shot higher after an impressive third quarter update prompted an earnings guidance uplift.

Product sales were up 13% year-on-year to US$1.19bn, with eight of the firm’s products racking up double-digit growth in the quarter, including Vyvance, its attention deficit hyperactivity disorder treatment, which saw sales race ahead 21% from last year’s third quarter levels.

Operating income on a generally accepted accounting principles (GAAP) basis surged 25% to US$340.8mln from US$273.4mln a year earlier, while underlying pre-tax profit improved 24% to US$332.8mln from US$268.6mln.

The company increased its guidance on full-year non-GAAP earnings growth to the mid-to-high teens, prompting a 6% hike in the share price to 2,675p.

“I am delighted to be increasing our 2013 full year earnings guidance to delivering mid-to-high teens Non-GAAP earnings growth and guiding to continuing operating leverage for 2014 and 20151,” said Flemming Ornskov, Shire’s chief executive officer.

“We're confident in our prospects for the longer term as we continue to execute on commercial delivery, progress our prioritized pipeline and focus on targeted M&A. The benefits of our 'One Shire' reorganization are already evident in our year to date performance, we have a simpler, more efficient business and now expect Non-GAAP R&D and SG&A spend to be lower than current consensus expectations for this year and in 2014 and 2015,” Ornskov said.

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