AstraZeneca Announces China Partnerships, 4Q Profit Falls -- Update
(Adds updates throughout.)
By Carlo Martuscelli
Shares of AstraZeneca PLC (AZN.LN) reversed a morning fall after the company announced partnerships with two Chinese heavyweights, Alibaba Group Holding Ltd. (BABA) and Tencent Holdings Ltd., (TCEHY) alongside its fourth-quarter earnings.
The Anglo-Swedish pharmaceutical company said it will work with Alibaba subsidiary Ali Health, using technologies such as artificial intelligence to help with patient diagnosis and treatment. The company said a major area of collaboration will be traceable codes on drugs that will give consumers more information about the medicine they use.
In the second partnership, AstraZeneca will collaborate with Tencent to combat the online sale of counterfeit drugs.
The announcement of the partnerships coincides with U.K. Prime Minister Theresa May's state visit to China.
Shares had fallen in morning trade after the pharmaceutical company said pretax profit decreased 81% in the fourth quarter to $407 million, from $2.18 billion the year before. It missed analyst expectations of $552 million pretax profit.
AstraZeneca said revenue increased to $5.78 billion, up 3.4% on the previous-year period.
Product sales in the fourth quarter came to $5.49 billion compared with $5.26 billion the year before, AstraZeneca said. It guided for a low single-digit percentage increase in product sales for 2018.
The company said selling, general and administrative costs in the period more-than doubled to $3.08 billion.
AstraZeneca said it is guiding for core earnings per share in the range of $3.30 to $3.50, down from its 2017 core EPS figure of $4.28.
Berenberg said the core EPS guidance is 3% below expectations at the mid-point.
The company declared a second interim dividend of $1.90, bringing its full-year dividend to $2.80, unchanged from the year before.
AstraZeneca said it expects core research-and-development costs to either experience a low single-digit decline or remain unchanged.
"AstraZeneca's revenues improved over the course of the year, a sign of how our company is steadily turning a corner. Strong commercial execution helped us bring our science to more patients, making the most of our exciting pipeline," Chief Executive Pascal Soriot said.
Mr. Soriot said the company had performed well in China, where product sales increased 30% on a constant exchange-rate basis in the fourth quarter.
Shares of AstraZeneca at 1446 GMT were up 91 pence, or 1.9%, to 4978.50 pence, after having fallen as much as 2.9% earlier in the day.
Write to Carlo Martuscelli at email@example.com
(END) Dow Jones Newswires
February 02, 2018 10:34 ET (15:34 GMT)Copyright (c) 2018 Dow Jones & Company, Inc.