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AstraZeneca (AZN) Q4 Earnings & Sales Miss Estimates, Stock Down
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AstraZeneca’s (AZN - Free Report) fourth-quarter 2023 core earnings of 73 cents per American depositary share (“ADS”) missed the Zacks Consensus Estimate of 74 cents. Core earnings of $1.45 per share rose 5% year over year on a reported basis and 7% at constant exchange rates (“CER”).
Total revenues of $12.02 billion rose 7% on a reported basis and 8% at CER. Revenues slightly missed the Zacks Consensus Estimate of $12.11 billion. Excluding COVID-19 medicines, total revenues increased 16%, both on a reported basis and at CER.
All growth rates mentioned below are on a year-over-year basis and at CER.
Product Sales
Product sales rose 5% at CER to $11.32 billion, driven by sales of its non-COVID products. Collaboration revenues were $277.0 million in the quarter, up 74%. Alliance revenues were up 67% year over year to $424 million.
Among AstraZeneca’s various therapeutic areas, Oncology product sales were up 24%. Cardiovascular, Renal and Metabolism (“CVRM”) product sales were up 18%, while the Respiratory & Immunology (“R&I”) segment rose 13%. Vaccines & Immune Therapies sales declined 66%. Rare disease product sales were up 9%. Sales of other medicines declined 32%.
Sales of Some Key Drugs
In Oncology, Tagrisso recorded sales of $1.42 billion, up 6% year over year, on strong demand as a first-line and adjuvant treatment. However, price reductions in Japan and the reclassification of Australian government rebates hurt the top line. Tagrisso sales missed the Zacks Consensus Estimate of $1.50 billion as well as our model estimate of $1.58 billion.
Imfinzi generated sales of $1.14 billion in the quarter, up 52% year over year, driven by increased use in recent launches like gastrointestinal, biliary tract and hepatocellular carcinoma cancers and stable growth in established indications like SCLC and Stage III NSCLC. Product sales from Imjudo are included in the Imfinzi line, which are also contributing to sales growth. Imfinzi sales missed the Zacks Consensus Estimate of $1.19 billion as well as our estimate of $1.15 billion.
Lynparza product revenues rose 8% year over year to $741 million, as increased market share was partially offset by the declining use of the PARP inhibitors class of drugs and some label restrictions for use in second-line ovarian cancer in the United States. Also, market expansion re-pricing in Japan and price reductions in China hurt sales. Lynparza sales missed the Zacks Consensus Estimate and our estimate of $750.0 million and $795.2 million, respectively.
AstraZeneca markets Lynparza in partnership with Merck (MRK - Free Report) . In the quarter, AstraZeneca received $245 million as a milestone payment from partner Merck related to Lynparza, which was recorded under Collaboration revenues.
In CVRM, Farxiga recorded product sales of $1.61 billion in the quarter, up 35% year over year, reflecting accelerated volume growth compared with the overall SGLT2 inhibitor class in general. The label expansion approvals for heart failure and chronic kidney disease indications contributed to Farxiga’s sales growth in the United States and Europe. In Emerging markets, Farxiga is witnessing solid growth despite generic competition. Farxiga sales missed the Zacks Consensus Estimate of $1.64 billion and our model estimate of $1.72 billion.
In R&I, Symbicort sales declined 16% in the quarter to $520.0 million due to generic erosion in the United States, Japan and Europe. Pulmicort sales rose 40% to $219 million.
Fasenra recorded sales of $420 million in the quarter, up 9% year over year. Fasenra sales missed the Zacks Consensus Estimate of $431 million and our model estimate of $455.9 million.
New lupus drug, Saphnelo, recorded sales of $89 million in the quarter compared with $76 million in the previous quarter, driven by demand growth in the U.S. market and ongoing launches in Europe and Japan.
Tezspire, which AstraZeneca markets in partnership with Amgen (AMGN - Free Report) , recorded product sales of $35 million compared with $21 million in the previous quarter. Amgen records sales in the United States and AstraZeneca records its share of U.S. gross profits as Alliance Revenue. AstraZeneca books Product Sales in markets outside the United States.
In the Rare Disease portfolio, Soliris recorded sales of $715 million, down 13% year over year due to conversion to Ultomiris. Soliris sales missed the Zacks Consensus Estimate of $731 million and our model estimate of $719.5 million.
Ultomiris revenues were $825 million, up 38%, driven by growth in neurology indications, geographic expansions in new markets and continued conversion from Soliris.
In Vaccines & Immune Therapies, AstraZeneca recorded $54 million as Beyfortus product sales from products supplied to partner Sanofi (SNY - Free Report) . AstraZeneca and Sanofi’s respiratory syncytial virus antibody Beyfortus (nirsevimab) was approved in the United States for the prevention of lower respiratory tract infection in newborns and infants in July.
AstraZeneca also recorded $41 million under Alliance revenues, which comprised its 50% share of gross profits on sales of Beyfortus in major markets outside the United States received from Sanofi. It recorded another $27 million from Sanofi for achieving a sales milestone under Collaboration Revenue.
Profit Discussion
AstraZeneca’s core gross margin of 80% was up 2 percentage points at CER. The dilutive effect from profit-sharing arrangements was offset by a positive mix due to increased contributions from oncology and rare disease medicines. COVID-19 medications, which were dilutive to gross margin, declined substantially in the quarter, thereby improving the company’s gross margin mix.
Core selling, general and administrative expenses increased 12% to $4.0 billion due to market development for recent launches and pre-launch activities.
Core research and development expenses rose 14% to $2.91 billion due to increasing investment in the pipeline. The core operating margin was 23.0% in the quarter, flat on a CER basis.
2023 Results
Full-year 2023 sales rose 3% on a reported basis and 6% at CER to $45.81 billion. Revenues marginally missed the Zacks Consensus Estimate of $45.90 billion.
Core earnings per share for 2023 were $7.26. Core earnings per share rose 9% year over year on a reported basis and 15% at CER, in line with the guided range of low double-digit to low-teens percentage at CER. Core earnings of $3.63 per ADS missed the Zacks Consensus Estimate of $3.66.
2024 Guidance
Management issued its financial guidance for 2024. AstraZeneca expects total revenues to increase in the low double-digit to low teens percentage in 2024 at CER.
Core earnings per share are also expected to increase in the low double-digit to low teens percentage range.
Foreign exchange is expected to have a low single-digit percentage adverse impact on total revenues and core EPS in 2024.
Our Take
AstraZeneca’s fourth-quarter results were rather weak, as it missed estimates for both earnings and sales. Revenues of almost all key drugs, Tagrisso, Imfinzi, Farxiga and Lynparza, missed expectations. Price reductions of some drugs in emerging markets hurt the top line in the quarter. However, the company's expectations of revenue and earnings growth in the low double-digit to low teens percentage are encouraging.
In response to the lukewarm results, shares were down 5.4% in pre-market trading on Thursday.
In the past year, the stock has increased 3.8% compared with the industry’s 25.6% rise.
Image Source: Zacks Investment Research
In the fourth quarter, AstraZeneca gained approval for two new medicines in the United States, Truqap for breast cancer and Wainua (eplontersen) for hereditary transthyretin-mediated amyloid polyneuropathy, commonly called ATTRv-PN. The company also announced acquisitions of clinical-stage biotech Gracell Biotechnologies and Icosavax, which makes differentiated vaccines leveraging its innovative, protein virus-like particle platform.
Backed by its new products and pipeline drugs, AstraZeneca believes it can post industry-leading top-line growth in the 2025-2030 period.
Image: Shutterstock
AstraZeneca (AZN) Q4 Earnings & Sales Miss Estimates, Stock Down
AstraZeneca’s (AZN - Free Report) fourth-quarter 2023 core earnings of 73 cents per American depositary share (“ADS”) missed the Zacks Consensus Estimate of 74 cents. Core earnings of $1.45 per share rose 5% year over year on a reported basis and 7% at constant exchange rates (“CER”).
Total revenues of $12.02 billion rose 7% on a reported basis and 8% at CER. Revenues slightly missed the Zacks Consensus Estimate of $12.11 billion. Excluding COVID-19 medicines, total revenues increased 16%, both on a reported basis and at CER.
All growth rates mentioned below are on a year-over-year basis and at CER.
Product Sales
Product sales rose 5% at CER to $11.32 billion, driven by sales of its non-COVID products. Collaboration revenues were $277.0 million in the quarter, up 74%. Alliance revenues were up 67% year over year to $424 million.
Among AstraZeneca’s various therapeutic areas, Oncology product sales were up 24%. Cardiovascular, Renal and Metabolism (“CVRM”) product sales were up 18%, while the Respiratory & Immunology (“R&I”) segment rose 13%. Vaccines & Immune Therapies sales declined 66%. Rare disease product sales were up 9%. Sales of other medicines declined 32%.
Sales of Some Key Drugs
In Oncology, Tagrisso recorded sales of $1.42 billion, up 6% year over year, on strong demand as a first-line and adjuvant treatment. However, price reductions in Japan and the reclassification of Australian government rebates hurt the top line. Tagrisso sales missed the Zacks Consensus Estimate of $1.50 billion as well as our model estimate of $1.58 billion.
Imfinzi generated sales of $1.14 billion in the quarter, up 52% year over year, driven by increased use in recent launches like gastrointestinal, biliary tract and hepatocellular carcinoma cancers and stable growth in established indications like SCLC and Stage III NSCLC. Product sales from Imjudo are included in the Imfinzi line, which are also contributing to sales growth. Imfinzi sales missed the Zacks Consensus Estimate of $1.19 billion as well as our estimate of $1.15 billion.
Lynparza product revenues rose 8% year over year to $741 million, as increased market share was partially offset by the declining use of the PARP inhibitors class of drugs and some label restrictions for use in second-line ovarian cancer in the United States. Also, market expansion re-pricing in Japan and price reductions in China hurt sales. Lynparza sales missed the Zacks Consensus Estimate and our estimate of $750.0 million and $795.2 million, respectively.
AstraZeneca markets Lynparza in partnership with Merck (MRK - Free Report) . In the quarter, AstraZeneca received $245 million as a milestone payment from partner Merck related to Lynparza, which was recorded under Collaboration revenues.
In CVRM, Farxiga recorded product sales of $1.61 billion in the quarter, up 35% year over year, reflecting accelerated volume growth compared with the overall SGLT2 inhibitor class in general. The label expansion approvals for heart failure and chronic kidney disease indications contributed to Farxiga’s sales growth in the United States and Europe. In Emerging markets, Farxiga is witnessing solid growth despite generic competition. Farxiga sales missed the Zacks Consensus Estimate of $1.64 billion and our model estimate of $1.72 billion.
In R&I, Symbicort sales declined 16% in the quarter to $520.0 million due to generic erosion in the United States, Japan and Europe. Pulmicort sales rose 40% to $219 million.
Fasenra recorded sales of $420 million in the quarter, up 9% year over year. Fasenra sales missed the Zacks Consensus Estimate of $431 million and our model estimate of $455.9 million.
New lupus drug, Saphnelo, recorded sales of $89 million in the quarter compared with $76 million in the previous quarter, driven by demand growth in the U.S. market and ongoing launches in Europe and Japan.
Tezspire, which AstraZeneca markets in partnership with Amgen (AMGN - Free Report) , recorded product sales of $35 million compared with $21 million in the previous quarter. Amgen records sales in the United States and AstraZeneca records its share of U.S. gross profits as Alliance Revenue. AstraZeneca books Product Sales in markets outside the United States.
In the Rare Disease portfolio, Soliris recorded sales of $715 million, down 13% year over year due to conversion to Ultomiris. Soliris sales missed the Zacks Consensus Estimate of $731 million and our model estimate of $719.5 million.
Ultomiris revenues were $825 million, up 38%, driven by growth in neurology indications, geographic expansions in new markets and continued conversion from Soliris.
In Vaccines & Immune Therapies, AstraZeneca recorded $54 million as Beyfortus product sales from products supplied to partner Sanofi (SNY - Free Report) . AstraZeneca and Sanofi’s respiratory syncytial virus antibody Beyfortus (nirsevimab) was approved in the United States for the prevention of lower respiratory tract infection in newborns and infants in July.
AstraZeneca also recorded $41 million under Alliance revenues, which comprised its 50% share of gross profits on sales of Beyfortus in major markets outside the United States received from Sanofi. It recorded another $27 million from Sanofi for achieving a sales milestone under Collaboration Revenue.
Profit Discussion
AstraZeneca’s core gross margin of 80% was up 2 percentage points at CER. The dilutive effect from profit-sharing arrangements was offset by a positive mix due to increased contributions from oncology and rare disease medicines. COVID-19 medications, which were dilutive to gross margin, declined substantially in the quarter, thereby improving the company’s gross margin mix.
Core selling, general and administrative expenses increased 12% to $4.0 billion due to market development for recent launches and pre-launch activities.
Core research and development expenses rose 14% to $2.91 billion due to increasing investment in the pipeline. The core operating margin was 23.0% in the quarter, flat on a CER basis.
2023 Results
Full-year 2023 sales rose 3% on a reported basis and 6% at CER to $45.81 billion. Revenues marginally missed the Zacks Consensus Estimate of $45.90 billion.
Core earnings per share for 2023 were $7.26. Core earnings per share rose 9% year over year on a reported basis and 15% at CER, in line with the guided range of low double-digit to low-teens percentage at CER. Core earnings of $3.63 per ADS missed the Zacks Consensus Estimate of $3.66.
2024 Guidance
Management issued its financial guidance for 2024. AstraZeneca expects total revenues to increase in the low double-digit to low teens percentage in 2024 at CER.
Core earnings per share are also expected to increase in the low double-digit to low teens percentage range.
Foreign exchange is expected to have a low single-digit percentage adverse impact on total revenues and core EPS in 2024.
Our Take
AstraZeneca’s fourth-quarter results were rather weak, as it missed estimates for both earnings and sales. Revenues of almost all key drugs, Tagrisso, Imfinzi, Farxiga and Lynparza, missed expectations. Price reductions of some drugs in emerging markets hurt the top line in the quarter. However, the company's expectations of revenue and earnings growth in the low double-digit to low teens percentage are encouraging.
In response to the lukewarm results, shares were down 5.4% in pre-market trading on Thursday.
In the past year, the stock has increased 3.8% compared with the industry’s 25.6% rise.
Image Source: Zacks Investment Research
In the fourth quarter, AstraZeneca gained approval for two new medicines in the United States, Truqap for breast cancer and Wainua (eplontersen) for hereditary transthyretin-mediated amyloid polyneuropathy, commonly called ATTRv-PN. The company also announced acquisitions of clinical-stage biotech Gracell Biotechnologies and Icosavax, which makes differentiated vaccines leveraging its innovative, protein virus-like particle platform.
Backed by its new products and pipeline drugs, AstraZeneca believes it can post industry-leading top-line growth in the 2025-2030 period.
Zacks Rank
Currently, AstraZeneca has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
AstraZeneca PLC Price and Consensus
AstraZeneca PLC price-consensus-chart | AstraZeneca PLC Quote