AstraZeneca anticipates a hit to performance due to the Coronavirus outbreak in China

AstraZeneca anticipates a hit to performance due to the Coronavirus outbreak in China
Written by:
Michael Harris
15th February, 11:51
Updated: 11th March, 08:58
  • AstraZeneca anticipates a hit to performance due to the Coronavirus outbreak in China.
  • AstraZeneca posts $6.25 billion in sales in the fourth quarter of 2019.
  • AstraZeneca made 89 cents of earnings per share in 2019's fourth quarter.

AstraZeneca is the latest in the list of firms that anticipated a major hit to the performance ascribed to the recent outbreak of Coronavirus in China. While the outlook for the next quarters wasn’t too optimistic, the pharmaceutical company highlighted that its operations have so far not been disrupted significantly due to the health emergency.

AstraZeneca has a reputation for one of the largest drug makers across the globe. Following Friday’s announcement, the company was seen losing traction in the stock market. Share prices were last seen 6% down after its Q4 results printed worse than expected.

CEP Pascal Soriot Says Revenue Will Return To The Top End Of The Forecast

CEO Pascal Soriot, however, stirred optimism with his statement regarding operations keeping close to normal despite the virus outbreak. He further added that the company’s revenue will soon return to the top end of the forecast if the health emergency is handled efficiently by the authorities.

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Annual growth in revenue was noted at 13% in 2019. For fiscal 2020, the company expects the revenue to grow by a high single digit to even a low double digit (percentage). According to Refinitiv, analysts are expecting the company to note a 10% growth in its revenue this year. As per Jefferies, a growth of anything below 10% would rather be disappointing for the company.

AstraZeneca’s performance in the stock market has remained challenged so far in 2020. It opened in January at around 7,405 pence. With just over 1% of loss, the stock is exchanging hands at 7,300 pence per share at the time of writing. In 2019, however, its performance was largely upbeat. While AstraZeneca was reported trading around 6,000 pence in January 2019, it closed the year around 7,700 pence that translates to around 30% of annual gain in the stock market.

19% Of The Total Quarterly Sales Were Attributed To China

The company attributed much of its success to higher sales in China in the recent quarter. At $1.19 billion, sales in China were reported 28% higher in 2019’s Q4. 19% of total quarterly sales were attributed to China.

Total sales in the quarter were valued at $6.25 billion while the company also announced to have made 89 cents of earnings per share in the fourth quarter. In its guidance for fiscal 2020, the company said that it expects its earnings to improve by a mid to high teens percentage this year. In 2019, the figure was capped at 1%. Analysts, on the other hand, are expecting a 20% growth in the company’s earnings in 2020.

The CEO also highlighted that the overall performance is in line with AstraZeneca’s target of over 30% operating profit margin in the next year.

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