AstraZeneca's COVID-19 Vaccine Loses Shine, Cancer Drug Imfinzi & Emerging Markets Stabilize Q1 Revenues

AstraZeneca Plc AZN has reported Q1 FY23 core EPS of $1.92, up 1% Y/Y (+6% on constant currency), better than the consensus of $1.07.

The company clocked Q1 sales of $10.88 billion, -4% (flat CC), beating the consensus of $10.75 billion.

The company said that total revenue was stable, despite a decline of $1.46 billion from COVID-19 medicines. Excluding COVID-19 medicines, revenue increased by 15%, and product sales increased by 16%

Core Gross margin of 83%, up four percentage points, reflecting the decline in sales of lower margin COVID-19 medicines, the cost of production in prior periods, and a mix shift to more specialty medicines.

Core Operating margin of 36%, up one percentage point, reflecting a $220 million increase in Core Other operating income, which included a gain from the divestment of Pulmicort Flexhaler rights in the U.S.

The company's cancer drug Imfinzi generated $900 million in the quarter. Sales of its COVID-19 vaccine, Vaxzevria, dropped to $28 million in the first quarter, versus $1.14 billion over the same period last year, as the company lost ground to rival mRNA shots.

CEO Pascal Soriot said AstraZeneca's performance in emerging markets was particularly strong.

Excluding sales of its COVID-19 products, sales rose 22% to $3.14 billion in emerging markets on a constant currency basis and 14% on a reported basis.

Guidance: AstraZeneca reiterates FY23 guidance with revenue to increase by a low-to-mid single-digit percentage and low double-digit percentage, excluding COVID-19 medicines.

Core EPS is expected to increase by a high single-digit to a low double-digit percentage.

Price Action: AZN shares are up 0.71% at $74.17 during the premarket session on the last check Thursday.

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