AstraZeneca share price drops despite revenue growth after Pfizer rejection

Has AstraZeneca's confidence about its ability to keep growing without a larger parent like Pfizer at the helm paid off? The pharmaceutical giant posted figures this morning showing revenues had grown five per cent to $6.54bn (£4.09bn) during its third quarter.

 

This beat analyst expectations of $6.41bn growth for the period, marking the British pharmaceutical company's third consecutive quarter of growth, having rejected a £73.82bn takeover bid by US competitor Pfizer in May.

 

Earnings guidance for the rest of the year was raised following the announcement. In a statement, the company said: “Revenue is now expected to increase in low single digits [on a currency adjusted basis], an upgrade on our previous guidance for revenue to be in line with 2013.”

 

Core earnings per share were $1.05, eight per cent lower than for the equivalent period last year, but the figure was still slightly higher than analyst expectations of $1.03.

 

Investors failed to be impressed by the results, however, sending shares in the company down 2.4 per cent to £45.09 in mid-morning trading.

 

In light of the increase in revenue expectations for the year, the company said it is planning to focus on longer-term growth, increasing spending on research and development in order to accelerate the creation of new drugs as older ones lose their patent protection. 

 

“We have chosen to invest in our rapidly developing pipeline that will continue to create value for AstraZeneca in 2015 and beyond,” said Pascal Soriot, AstraZeneca's chief executive.