AstraZeneca Plc (AZN) reported a 37% dip in earnings for the third quarter due to lower revenue, a decline in gross margin and an increase in the selling, general and administrative costs. The bottom line came in above analysts’ expectations while the top line missed consensus estimates.
Profit after tax dropped 37% to $406 million or $0.34 per share. Core earnings plunged 37% to $0.71 per share. Total revenues decreased 14% to $5.34 billion.
For the quarter, product sales rose by 8% on the strong performance of new medicines and the sustained strength in Emerging Markets. Oncology sales surged by 56% as the pipeline is designed to deliver sustainable growth and advances in treatment for patients.
On a geographical region, product sales from emerging markets increased 12%, sales from China soared 32%, and that from the US grew 25%. Product sales from Europe, established Rest of the World, and Japan each declined by 5%, 12%, and 13%, respectively.
Looking ahead into the full year 2018, the company is on track to deliver its guidance. Product sales are expected to be in the range of a low single-digit percentage growth. Core earnings are predicted to be in the range of $3.30 to $3.50 per share.
As part of its long-term growth strategy, AstraZeneca remains committed to focusing on appropriate cash-generating and value-accretive externalization activities that reflect the ongoing productivity of the pipeline. Core research and development costs are now anticipated to fall by a low single-digit percentage compared to the previous estimate range of stable to low single-digit percentage decline.
Shares of AstraZeneca opened Thursday’s regular session higher and is trading above 3% in the early trade. The stock has risen over 17% in the year so far and over 21% in the past year.