Drugmaker AstraZeneca Returns To Growth


British drugmakerAstraZeneca ( AZN ) has turned the corner after seeing its earnings fall for five straight quarters.

In late July, the company delivered second-quarter earnings of $1.30 a share, up 8% from a year ago. Profit fell 17% to 28% in the prior five quarters. Sales rose 4% to more than $6.45 billion. Revenue had been flat to down 21% in the prior 10 quarters.

The latest period's results were helped by solid sales of AstraZeneca's Brilinta blood thinner, which jumped 84%. Its diabetes franchise was also strong, thanks to diabetes drug Farxiga's U.S. debut and assets bought fromBristol-Myers Squibb ( BMY ). The firm also noted strength in emerging markets, which saw an 11% rise in sales. Business in China increased 23%.

After rejecting a $118 billion takeover offer fromPfizer ( PFE ) in May, AstraZeneca has been busy with its own deals. Last week, the company announced that it would buy Spanish firm Almirall's respiratory drug franchise for $875 million up front, plus up to $1.22 billion when certain targets are met. The deal is expected to add to earnings in 2016.

Also in July, AstraZeneca inked partnerships with Roche andQiagen ( QGEN ) to make diagnostic tests.

Unlike other companies, which pay dividends quarterly, AstraZeneca pays shareholders only twice a year, in September and March of the following year. Its second payment is bigger than the first.

AstraZeneca has paid a $2.80 a share annual dividend in the past three years. It has a yield of about 3.8%, the second biggest in IBD's Medical-Ethical Drugs group.GlaxoSmithKline ( GSK ) offers the largest yield, around 5.4%.

After shooting out from an irregular consolidation in late April, AstraZeneca has pulled back recently and appears to be forming a new base. The stock has been hugging its 10-week moving average in recent weeks.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.

This article appears in: Personal Finance , Investing Ideas

Referenced Stocks: AZN , BMY , PFE , QGEN , GSK

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