AstraZeneca (NASDAQ:AZN) shares fell more than 6% in premarket trading Thursday after the drugmaker reported notably lower-than-expected core operating profit for the fourth quarter.
Earnings per share (EPS) came in at $1.45 in Q4, topping the forecasted $0.74. The pharmaceutical giant generated a quarterly revenue of $12.02 billion, also above the consensus estimate of $12 billion.
Core operating profit rose 5.4% year-over-year to $2.75 billion, but was well below the consensus projection of $3.22 billion.
The company saw a 4.9% YoY increase in product sales, reaching $11.32 billion, although this was also short of the anticipated $11.41 billion.
AstraZeneca's core operating margin in the quarter stood at 22.9%, compared to 23% in the previous year, and missing the analysts’ expectations of 26.7%. The core gross margin improved to 79.8% from 77% year over year, though it did not meet the projected 80.4%.
Research and development (R&D) expenses rose by 17% YoY to $3.07 billion, exceeding the estimate of $2.66 billion. Similarly, selling, general, and administrative (SG&A) expenses grew by 16% YoY to $5.37 billion, surpassing the forecasted $5.05 billion.
Looking ahead, AstraZeneca provided its financial outlook for the full year 2024, adjusting for currency exchange rates based on the average rates throughout 2023.
The drugmaker anticipates total revenue to grow by a low double-digit to low teens percentage. Similarly, core EPS is expected to see an increase in the low double-digit to low teens percentage range.
“In our view, concerns surrounding the 2024 outlook have weighed on AstraZeneca shares in recent months and with consensus expectations unlikely to materially change on the back of the FY24 guidance, we see recent weakness as an opportunity to buy ahead of the Investor Day on 21 May 2024,” Morgan Stanley analysts said.