AstraZeneca Raises Profit Outlook

First-quarter earnings top estimates by 10 cents.
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AstraZeneca

(AZN) - Get Report

produced a first-quarter financial report that not only beat Wall Street's earnings expectations but also prompted the drug giant to raise its guidance for the year.

AstraZeneca's profit was $1.42 billion, or 90 cents a share, for the three months ended March 31, the company said Thursday. Wall Street was looking for 80 cents a share.

The Anglo-Swedish company's revenue of $6.18 billion was a shade under the $6.24 billion consensus estimate from Thomson First Call. For the same period last year, the company earned $1.04 billion, or 63 cents a share, on revenue of $5.74 billion.

The first-quarter earnings "give us confidence for the remainder of the year," said CEO David Brennan in a prepared statement. AstraZeneca raised its full-year profit prediction to a range of $3.60 to $3.90 a share from its estimate in February that it would earn $3.40 to $3.60. The consensus estimate was $3.36.

In morning trading, AstraZeneca's stock was up 76 cents, or 1.4%, to $54.56.

The company's forecast includes an estimate that the blood-pressure drug Toprol XL will produce earnings of 33 cents a share for the final eight months of 2006. Two U.S. patents are being challenged by three generic companies. AstraZeneca lost a federal court decision in January, and it has filed an appeal maintaining that the patents should remain in force until Sept. 17, 2007.

AstraZeneca said the 33-cents-a-share prediction represents the maximum amount, assuming that the generic companies get final approval from the Food and Drug Administration and start marketing the products before all legal appeals have been decided.

The forecast excludes one-time asset or inventory adjustments related to the patent dispute. For the first quarter, Toprol XL recorded worldwide sales of $456 million, up 13% from the year-ago period.

AstraZeneca enjoyed big returns from some of its biggest drugs. Worldwide sales of the ulcer and heartburn drug Nexium grew 16% to $1.19 billion, while sales of the schizophrenia drug Seroquel advanced 29% to $807 million. Sales for the cholesterol-lowering drug Crestor jumped 45% to $387 million, and the breast cancer treatment Arimidex gained 38% to $335 million.

A generic-drug company is challenging five U.S. patents covering Nexium. The patents are due to expire between 2014 and 2019.