AstraZeneca's fourth-quarter results were "thoroughly underwhelming," a Deutsche Bank analyst said in a report Thursday as he downgraded AZN stock to a sell rating.
The U.K.-based drugmaker came in with mixed quarterly results. Core earnings climbed 5% to $1.45 per share. But that missed analysts' expectations for $1.50 a share, Leerink Partners analyst Andrew Berens said in a note to clients. Excluding the impact of exchange rates, earnings jumped 7%.
Sales rose 7% to $12.02 billion. Minus the exchange-rate impact, sales advanced 8%. But that lagged the average estimate of analysts polled by FactSet for $12.08 billion, though Leerink's Berens said it was just north of other expectations for $12.01 billion. Still, there were several notable sales misses. Revenue from cancer treatments Tagrisso, Imfinzi and Calquence fell short of analysts' expectations.
"The results are likely to create margin contraction concerns, weighing on shares," Berens said.
AZN stock took a nose dive, tumbling 4.6% to close at 63.52 on today's stock market. Shares undercut their 50-day moving average within a ten-month consolidation, according to MarketSmith.com.
AZN Stock: Key Misses Across Oncology
From AstraZeneca's oncology portfolio, the company's biggest drugs are Tagrisso, Imfinzi, Lynparza and Calquence. All four managed to tack on year-over-year growth, with the best coming from Imfinzi. Sales of checkpoint inhibitor surged 51% on a strict, as-reported basis to $1.14 billion. But Imfinzi sales were 3% below expectations, Berens said.
Tagrisso sales were 4% light at $1.42 billion despite strong performances in the U.S. and Europe. Revenue from Japan slipped on price cuts, while the Australian government changed its rebate process. There were also negative seasonal trends in China, Berens said. Calquence generated $675 million in sales, but lagged forecasts for $696 million.
Meanwhile, Merck-partnered Lynparza narrowly beat forecasts at $741 million in sales, up 8%.
Revenue from diabetes drug Farxiga, AstraZeneca's biggest moneymaker, rocketed 36% to $1.61 billion. That was narrowly ahead of forecasts, Berens said.
For the year, the pharmaceutical company guided expectations for both core earnings and revenue growth to between a low-double digit to low teens percentages. AZN stock analysts forecast earnings of $4.12 per share and $50.62 billion in sales.
Deutsche Bank's note said the report "missed in most of the place that matter," and that AstraZeneca's 2024 guidance was "nominally in-line with expectations."
Follow Allison Gatlin on X, the platform formerly known as Twitter, at @IBD_AGatlin.
