Sanofi reports its Q2 2018 results
Today, Sanofi (SNY) reported its Q2 2018 results before the market opened. The company registered sales of 8.2 billion euros, representing a YoY (year-over-year) decline of 5.7%. The sales in the quarter were up ~0.1% at CER (constant exchange rate) and down ~2.5% at a CER/CS (constant structure), adjusting for the Bioverativ acquisition. SNY stock is trending higher today after the earnings release.
The company reported business EPS of 1.25, down ~7.4% on a YoY basis. EPS in the quarter were up ~1.5% at CER. Net income was reported at ~1.6 billion in Q2 2018, which represented a decline of 7.9% on a reported basis but growth of ~0.4% at CER.
Major factors driving Sanofi’s Q2 2018 performance
In Q2 2018, Sanofi’s Genzyme was the major growth driver for the company. The company reported Genzyme sales of 1.8 billion euros, up ~33.1% at CER and ~14.1% at CER/CS. Bioverativ sales added 257 million euros in the quarter. Emerging markets growth was at 5.2%, with double-digit China growth. The performance of the consumer healthcare business was up ~4.1% at CER. These were the other growth drivers for Sanofi in Q2 2018.
The loss of exclusivity rights for Lantus in the diabetes franchise and sevelamer in the established pharmaceuticals franchise continued to drive down the company’s sales in Q2 2018. Moreover, weakness in the Sanofi Pasteur portfolio remained one of the key headwinds for Sanofi in Q2 2018. Competition and pricing pressures continued to weigh down the company’s sales in the quarter. However, Sanofi believes it’s poised for growth going forward with some of these headwinds subsiding in the second half of fiscal 2018 and the key strategic acquisitions of Bioverativ and Ablynx in January.
According to Sanofi’s CEO Olivier Brandicourt, “In the second quarter, we achieved significant milestones in building our new Rare Blood Disorder franchise and the successful continued execution of the global roll-out of Dupixent. As the impact from the U.S. losses of exclusivity peaked in the second quarter, the growth of our diversified businesses largely compensated for these headwinds. We look forward to entering a new growth phase led by our increasing focus on Specialty Care and our leadership positions in Emerging Markets and Vaccines.”
Sanofi narrowed its fiscal 2018 guidance
In its Q2 2018 earnings release, Sanofi narrowed its business EPS growth guidance for fiscal 2018 to a range of 3%–5% at CER. The negative impact of currency on the company’s business EPS is expected to be -6% for fiscal 2018.
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