Shares in pharmaceutical giant AstraZeneca (AZN) were unmoved despite the company raising full year earnings guidance as second quarter revenues and core earnings fell short of market expectations.

Reported revenues were 33% higher at $8.22 billion, around 8% better than consensus.

However, if you exclude an $894 million contribution from sales of the firm’s Covid-19 vaccine, revenues grew 17% to $7.32 billion, which was around 2% shy of expectations according to Shore Capital analyst Adam Barker.

AstraZeneca is selling its vaccine at cost which impacts overall profitability. In the first quarter sales of the Covid-19 vaccine were $275 million.

Core earnings per share dropped 6% to $0.90 which was slightly behind expectations due to higher sales and marketing costs. First half earnings per share increased by 37% (or 45% in constant currencies) to $1.61.

UPGRADED GUIDANCE BAKED IN

Following the successful $39 billion acquisition of US rare diseases company Alexion, the company has upgraded guidance with revenues now expected to increase by a low twenty’s percentage, up from low teens.

Meanwhile full year core earnings are expected to be between $5.05 and $5.40 compared with $4.75 to $5.00, around 7% higher at the mid-point.

Consensus expectations already reflect increased guidance with revenues forecast to increase 24% to $33 billion while earnings per share are pegged at $5.16 according to Refinitiv.

The cancer and cardiovascular franchises were the standout performers with revenues up 19% and 21% to $6.36 billion and $2.73 billion respectively in the first half.

Lung cancer drug Tagrisso continued to perform well with sales up 26% in the quarter to $1.31 billion and 22% in the half to $2.45 billion.

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Issue Date: 29 Jul 2021