AstraZeneca’s 1Q17 revenue

AstraZeneca’s (AZN) revenues are expected to fall 12.2% to $5.4 billion during 1Q17 as compared to $6.1 billion for 1Q16. As discussed earlier, the company is set to release its earnings on April 27, 2017.

Why AstraZeneca Could See Lower Revenues in 1Q17

The above graph shows the revenues of AstraZeneca over last few quarters and analysts’ estimates for 1Q17. As the company has its operations in over 100 countries and ~60% of total revenues come from sales outside US markets, the company is very exposed to currency risk.

Segment-wise performance

Analysts expect the company’s four segments to post the following revenue performances:

  • The cardiovascular and metabolic diseases segment’s revenues are expected to fall in 1Q17, mainly due to lower sales of Crestor, Atacand, and Byetta, partially offset by higher sales of Brilinta, Farxiga, and Seloken.
  • The respiratory segment’s revenues are expected to fall in 1Q17, as the increase in sales of Pulmicort and new products like Duaklir and Daliresp will likely be offset by the lower sales of Symbicort and Tudorza/Eklira during the quarter.
  • The oncology segment’s revenues are expected to increase in 1Q17 due to the strong performance of new products including Tagrisso and Lynparza as well as Zoladex and Faslodex, partially offset by lower sales of Iressa, Casodex, and Arimidex.
  • Other product revenues are expected to fall in 1Q17 due to the lower sales of key drugs including Nexium, Seroquel, Losec, and FluMist.

Growth platforms

AstraZeneca has classified certain products and regions as growth platforms. The growth platforms include:

  • respiratory and diabetes products Brilinta and Brilique
  • new oncology products Tagrisso and Lynparza
  • regional sales from emerging markets and Japan

The growth platforms account for over 60% of AstraZeneca’s revenues.

To divest the risk, investors can consider ETFs like the Vanguard FTSE All-World Ex-US ETF (VEU), which holds ~0.2% of its total assets in AstraZeneca. VEU also holds 0.9% of its total assets in GlaxoSmithKline (GSK), 0.7% of its total assets in Novartis (NVS), and 0.4% of its total assets in Sanofi (SNY).

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