Revenue in the fourth quarter was down 3 percent at CER and declined by 4 percent on an actual basis as a result of the negative impact of exchange rate movements. A strong 5 percent revenue increase in the Rest of World was more than offset by the 12 percent decline in US revenue resulting from generic competition for several products and the absence of H1N1 pandemic influenza vaccine revenue. Emerging Markets was a key driver in the Rest of World performance, with revenue up 15 percent. Revenue in Established Rest of World was up 8 percent, including a 15 percent increase in Canada. Revenue in Western Europe was down 1 percent.
Core operating profit in the fourth quarter was $2,865 million, down 2 percent. Core operating profit declined by less than revenue as a result of operating efficiencies and higher other income. Net adjustments to arrive at Core operating profit were $454 million compared with $719 million in the fourth quarter 2009. Legal provisions and the Merck and MedImmune related amortisation adjustments were broadly comparable between the periods. Fourth quarter 2010 charges for restructuring costs ($425 million) and intangible impairments ($568 million) were significantly higher than last year, but the increase in these items was more than offset by an adjustment to exclude a $791 million gain, arising from changes made to benefits under certain of the Group's post-retirement plans, chiefly the Group’s UK pension plan. As a result of these differences in Core adjusting items, reported operating profit increased by 9 percent in the fourth quarter.
Core earnings per share in the fourth quarter were up 1 percent to $1.39, with lower net finance expense and the lower number of shares outstanding due to the share repurchase programme offsetting the decline in Core operating profit. Reported earnings per share were up 11 percent to $1.15, reflecting a similar impact arising from the differences in Core adjustments seen in reported operating profit and the lower number of shares outstanding.
Full Year
Revenue for the full year of $33,269 million was unchanged at CER, as declines in the US from generic competition and the absence of H1N1 vaccine revenue was offset by good growth in the Rest of World. Revenue in the US was down 7 percent, whilst revenue in the Rest of World increased by 7 percent. Revenue in Emerging Markets exceeded $5 billion for the first time; the 16 percent growth in Emerging Markets accounted for more than half of the revenue growth in ROW markets. Revenue in Established Rest of World was up 7 percent. Revenue in Western Europe increased 2 percent.
Core operating profit was $13,603 million for the full year, unchanged at CER, in line with revenue. Net core adjusting items of $2,109 million were slightly higher than the $2,078 million in 2009. Legal provisions and amortisation were broadly comparable. Restructuring and intangible impairments were almost twice last year's level, but the increase was largely offset by the fourth quarter adjustment to exclude a $791 million gain arising from changes made to benefits under certain of the Group's post-retirement benefit plans, chiefly the Group's UK pension plan. As a result, reported operating profit was down 1 percent, broadly in line with the revenue and Core operating profit trend.
Core earnings per share were up 5 percent to $6.71 for the full year, with growth ahead of Core operating profit due to a lower effective tax rate, lower net finance expense and fewer shares outstanding. Reporting earnings per share were up 7 percent to $5.60.
David Brennan, Chief Executive Officer, said: "Our performance in 2010 underlines the strength and resilience of AstraZeneca's business. Despite government pricing pressures and anticipated patent expiries in the US and Western Europe, our revenues remained in line with the previous year driven by excellent performance of our key brands and continued growth in Emerging Markets. This performance, combined with disciplined management of the business enabled us to deliver increased earnings, increase the dividend and return residual cash to shareholders through share repurchases."
About AstraZeneca
AstraZeneca is a global, innovation-driven biopharmaceutical business with a primary focus on the discovery, development and commercialisation of prescription medicines. As a leader in gastrointestinal, cardiovascular, neuroscience, respiratory and inflammation, oncology and infectious disease medicines, AstraZeneca generated global revenues of US $32.8 billion in 2009.