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Roche’s Disappointing 3Q16 Earnings

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Oct. 24 2016, Updated 12:22 p.m. ET

Roche’s revenue in 3Q16

Roche Holding (RHHBY) reported earnings for 3Q16 on October 20, 2016. Wall Street analysts expected Roche to report 12.6 billion Swiss francs in revenue during 3Q16 while the company reported ~12.5 billion Swiss francs. This is an ~1.2% negative revenue surprise, which was taken adversely by the market.

Roche’s shares fell 0.75% to $29.23 on October 20. On year-over-year basis, Roche’s group sales rose 4% on a constant exchange rate basis.

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How did Roche’s Pharmaceuticals division perform in 3Q16?

For the first nine months of 2016, Roche’s Pharmaceuticals division grew 4% on constant exchange rate basis. Its Pharmaceuticals division formed 78% of the total group’s sales, generating 29.1 billion Swiss francs in the nine-month period. The division’s revenue growth was primarily driven by oncology and immunology drugs.

For the first nine months of 2016, US sales grew 3%, primarily driven by oncology and immunology. A 5% jump in sales in Europe was driven by higher revenue from Perjeta, Actemra, and MabThera.

How did Roche’s Diagnostics division perform in 3Q16?

Roche’s (RHHBY) Diagnostics division garnered 8.4 billion Swiss francs, contributing 22% to the overall group’s sales for the nine months. During this period, the Diagnostics division’s revenue rose 7%. The Diagnostic division’s revenue growth predominantly came through immunodiagnostics.

By investing in the Vanguard FTSE All-World Ex-US Index ETF (VEU), you can gain exposure to Roche as the fund invests 0.74% of its holdings in Roche. The fund also invests 0.84%, 0.31%, and 0.36% of its holdings in GlaxoSmithKline (GSK), Novo Nordisk (NVO), and Sanofi (SNY), respectively.

Let’s have a look at Roche’s detailed 3Q16 performance in the next part of this series.

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