Sanofi stock slides as it reveals bleaker than expected outlook

 
City A.M. Reporter
FRENCH pharmaceutical giant Sanofi said yesterday that its earnings could fall this year as it continues to feel the effects of expiring patents.

Sanofi, which saw earnings slide last year as cheaper generic rivals grabbed market share from some of its medicines, said 2013 earnings would be flat to five per cent lower than in 2012.

“The market was not expecting a decline this year,” said Natixis analyst Philippe Lanone.

“Sales trends are encouraging, but the 2013 earnings per share forecast is disappointing.”

Sanofi shares, which have gained about 25 per cent in the last twelve months, closed down nearly four per cent yesterday.

Business net income, which excludes items such as amortisation and legal costs, declined 24.3 per cent to €1.57bn (£1.34bn) in the fourth quarter.

The fall would have been even steeper without a favourable tax rate in the quarter, analysts said.

Sales rose 0.2 per cent to €8.53bn as the impact from austerity measures in Europe and generic competition offset favourable currency moves and growth from rare disease unit Genzyme.

The impact from government cutbacks on Sanofi’s earnings last year totalled €300m, it said.