Pharmaceuticals giant Astrazeneca saw profit nearly halve in the fourth quarter as the firm hit a bump in its road to recovery.
The FTSE blue chip warned that its 2020 growth would take a hit due to the expected knock-on effect of the coronavirus in China, its second biggest market.
Shares in the UK firm fell five per cent as markets opened.
Profit for the final quarter was $577m, 46 per cent down on the same period year-on-year. Full year profit also slipped 14 per cent, coming in at $2.9bn.
Revenue at Astrazeneca grew 10 per cent to $24.3bn for the full year, whilst in the last quarter it saw a four per cent rise to $6.7bn.
Earnings per share dropped 71 per cent in the final quarter to 24 cents, with the whole year price also declining 40 per cent to $1.03.
Product sales grew 12 per cent over the year, clocking in at $23.6bn.
Why it’s interesting
The pharmaceuticals firm said that growth in 2020 would be in the high single-digit to low double-digit percentages as the continued spread of the disease stifles demand in Asian markets.
The virus has now killed 1,300 people, whilst Chinese authorities announced 5,000 new cases today.
Analysts said that anything less than double-digit sales would be a disappointment for Astrazeneca, which had already warned of a slowdown in Asia due to changing government policies.
Russ Mould, investment director at AJ Bell, said: “AstraZeneca has somewhat reinvented itself in recent years after suffering from over-reliance on blockbuster drugs in the past.
“Losing patent protection on many of these drugs caused a big headache for management and the company’s earnings. It reacted by focusing more on developing treatments that are harder for rivals to replicate”.
What Astrazeneca said
Chief executive Pascal Soriot said: “In the first full year of our return to growth, we made good progress in line with our strategy.
“Driven by a strong team, 2020 is anticipated to be another year of progress for AstraZeneca. We are becoming a better-balanced business, both regionally and through our medicines.
“This transition is a further step towards improving operating leverage and cash generation. As we accelerate our commitments to achieving our long-term climate-change and decarbonisation targets, we will maintain our focus on executing a strategy centred on science and patients.”