Boston, MA 02/06/2014 (wallstreetpr) – Sanofi SA (ADR) (NYSE:SNY), the healthcare provider based in France, reported fourth quarter profits in line with the projections. Although sales were lower on the back of the weaker currency scenario in the emerging markets.
Sanofi’s Fourth Quarter Overview
Sanofi SA (ADR) (NYSE:SNY)‘s net income for the complete year, excluding charges, declined 17.5% on account of cheaper generic competition, inventory and manufacturing hurdles in Brazil and Canada and tough regulations for sales practices in China. However, record sales of the company’s diabetes drug Lantus coupled with Genzyme rare diseases unit and recovery in China and Brazil pushed its profits in the fourth quarter. The fourth quarter net income grew 16.8% to $2.45 billion (1.81 billion euros). But, the sales fell to 8.46 billion euros, that is, 0.8%, as a weak currency ate away 7.3% off the revenue growth. As per the Reuters polled survey, analysts had set the net income expectation of 1.77 billion and sales forecast at 8.4 billion euros for the quarter.
The not so good takeaway from Sanofi SA (ADR) (NYSE:SNY)‘s earnings call is its cautious guidance for the year 2014. Sanofi has set the EPS guidance to grow in between 4-7% for the current year. Reportedly, Sanofi had a rough time in 2013 as it posted constant decline in net income for the three quarters in a row and faced several failed studies coupled with FDA rejection for one of its drugs.
Hopes On New Drugs
Sanofi SA (ADR) (NYSE:SNY) is not alone to set a negative tone with cautious forecast, but AstraZeneca Plc too noted that its sales and profits might fall below market estimates due to fierce competition in generics hurting its sales, including the popular Nexium.The team at Sanford C. Bernstein & Co. said in their note to the investors that the guidance released from most of the pharma companies are reflecting weak estimates. According to them, Sanofy’s guidance still looks good amidthe fears gripping these companies.
Though Sanofi SA (ADR) (NYSE:SNY)’s CEO ChrisViehbacher refused to specify his expectations from the emerging markets, but he is betting on new drugs through partnering several pharma companies like Alnylam Pharmaceuticals Inc. (ALNY) and Regeneron Pharmaceuticals Inc. (REGN) and demand surge from emerging markets as factors to determine the future growth of the company. He is hopeful of the year 2014 as he sees a favorable demographic and benefit from large middle class group existent in countries like India and China.
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