AstraZeneca ( AZN) shrugged off a series of high-profile disappointments to produce fourth-quarter earnings that narrowly beat the Wall Street consensus. The performance pushed up the Anglo-Swedish drug company's stock in early trading by $1.50, or 4.2%, to $37.48. AstraZeneca earned $968 million, or 59 cents a share, on revenue of $5.8 billion for the three months ended Dec. 31. The consensus of analysts polled by Thomson First Call expected a profit of $967 million, or 58 cents a share, on revenue of $5.69 billion. For the same period in 2003, AstraZeneca earned $635 million, or 38 cents a share, on revenue of $4.88 billion. "We have delivered a strong fourth-quarter performance ... which has resulted in AstraZeneca achieving an excellent financial performance in 2004, despite some disappointments with recently introduced products," said Sir Tom McKillop, the company's chief executive. "We are determined to restore shareholder confidence and deliver good earnings growth in the coming years." McKillop predicted 2005 EPS would be in the range of $2.40 to $2.55. The Thomson First Call consensus estimate is $2.41 a share. For fiscal 2004, the company earned $3.8 billion, or $2.11 a share, on revenue of $21.4 billion. For fiscal 2003, AstraZeneca earned $3.04 billion, or $1.78 a share, on revenue of $18.85 billion. The biggest setback for AstraZeneca came in September when an advisory committee of the Food and Drug Administration recommended against the marketing of Exanta, a blood thinner, because the drug's risk of liver problems outweighed its benefits. In October, the FDA supported its advisory panel's opinion. Even though the drug is available on a limited basis in Europe, the defeat in the U.S. market was a crushing blow. "Discussions are ongoing with the FDA to determine if there is now a realistic prospect of bringing Exanta to the U.S. market," the company said Thursday. Earlier this month, French regulatory authorities asked the company to produce more information about the drug as a condition for Exanta being considered for expanded and longer-term use in Europe.
In another setback last month, the company reported that tests on its lung cancer drug Iressa showed that the medication, approved by the FDA in May 2003 under a special program, doesn't provide a survival benefit over placebo. The findings mean that Iressa could be removed from the U.S. market. And the company's cholesterol drug Crestor continues to be dogged by critics, such as the consumer group Public Citizen, which says the product has too many side effects and should be banned. AstraZeneca has responded vigorously and frequently, pointing out that clinical trials demonstrate the drug's safety and effectiveness. Crestor's sales have not grown as fast as many analysts have predicted. Still, the drug produced $908 million in sales for 2004, up from $129 million in 2003. AstraZeneca's revenue growth was paced by the heartburn/ulcer medication Nexium, whose 2004 sales rose by 15% to $3.9 billion; by the antipsychotic Seroquel, up 33% to $2 billion; and by the asthma drug Symbicort, up 32% to $797 million.