AstraZeneca PLC (LON:AZN) reiterated full-year guidance as it posted sales growth and registered an earnings beat with the oncology business delivering on its potential.
In the second quarter, the drugs giant posted sales of US$5.15bn, which generated earnings per share of 69 cents. While the latter figure was down year-on-year as costs nudged up, it was ahead of consensus, which Bloomberg reckons was around 61 cents.
Full-year guidance was reiterated, meaning the company is on course to post top-line growth in the “low single digits” and earnings of US$3.30-$3.50 a share.
AZ is currently undergoing a transformation as it cuts costs and manages the decline of former blockbusters such as the cholesterol buster Crestor.
Externalisation the new watchword
At the same time, it has a programme of selling or outsourcing drugs where it can still earn from these products. The company refers to this process as externalisation.
While doing this, a new class of top selling products are being lined up to reinvigorate the AZ’s financial performance.
Cancer drugs such as Lynparza, Tagrisso and Imfinzi boosted sales from the cancer portfolio by 42% in the first half.
Chief executive Pascal Soriot said the company remained “firmly on track” to return to product sales growth this year.
Results boost share price
The shares, up almost £5 in the last month, nudged 2.2% higher in early deals.
“We have long believed that the focus on R&D at the time of when Pascal Soriot took charge would soon enough begin to bring rewards and we are beginning to see that come through now,” said Helal Miah investment research analyst at The Share Centre.
“The pipeline remains attractive and the push into emerging markets will aid the turnaround in sales.
“These drivers have taken the share price to all-time highs but we believe that there is more to come.
“Added to that is the relatively attractive dividend which still makes the shares a ‘buy’ recommendation for income seekers willing to accept a low to medium level of risk.”