AstraZeneca plc (ADR) (NYSE:AZN) Stock Drops After Announcement Of Q1 Results

The earnings report which was released on Thursday revealed that the company had earnings per share of 27 cents which was a noteworthy decline from the 48 cents EPS that the firm reported in Q1 of the previous year. Other than the declining earnings, the company also failed to beat the earnings per share estimate of 35 cents that had been projected by analysts.

AstraZeneca’s Q1 results also revealed that it made a profit of $316 million, a significant drop from the $512 million profit that the company reported in Q1 of 2017. The firm had an operating profit of $696 million in the recent quarter which was also miles below the $917 million operating profit it reported in the first quarter of 2017. Its overall revenue for the quarter was $5.18 billion which was lower than the $5.41 billion reported in Q1 of the previous year. The company attributes this year-over-year decline to lower Initial Externalization Revenue.

Poor Crestor sales contributed significantly to the poor performance considering that they had a 38 percent decline, coming in at $389 million compared to the figure reported in the previous year. Meanwhile, AstraZeneca also revealed its revenue expectations for the year during the announcement of its Q1 results. The firm expects its earnings per share for the financial year 2018 to be between $3.30 and $3.50. The company also anticipates a single-digit rise in its products sales for the year.

Despite the negative performance especially compared to figures reported in Q1 of 2017, AstraZeneca still had some positive announcements. For example, it revealed that there was positive growth in the emerging markets by 22 percent and most of this growth was driven by China. It was also the first time that growth for the company was reported above $1 billion. Meanwhile, AstraZeneca claims that pipeline opportunities are still intact. The firm also claims that there is also a lot of excitement about its new medicines as well as their launch trajectories.

Japan and the EU are some of the key markets especially when it comes to the launch of new products but sales in these markets took a hit especially because the company lost exclusivity in these markets. Unfortunately, the company expects the impact of that loss to continue in Q2 and this changed investor outlook, leading to a drop in the value of the company’s stock. So far AstraZeneca has 6 upcoming launches and it is also planning to invest heavily in China. The company also revealed that it recently put in more effort towards focusing on its main markets especially with its sale of Seroquel.

AstraZeneca also revealed that it wants to remain focused on its strategy and this involves boosting its focus in three major areas which include respiratory, CVRM and oncology markets. the company expects performance in the future to remain strong especially since it has a strong portfolio of products that it offers in multiple markets.