AstraZeneca's Revenue in the third quarter was down 2 percent at CER, but was up 4 percent on an actual basis as a result of the positive impact of exchange rate movements. Revenue performance was impacted by government price interventions and the loss of more than $350 million in revenue to generic competition. US revenue was unchanged compared to last year after absorbing approximately 3.5 percent of adverse impact from the implementation of US healthcare reform measures. Revenue in the Rest of World was down 3 percent. Revenue in Western Europe was down 15 percent, resulting from volume declines due to generic competition combined with a mid-single digit decline in realised prices. Revenue in Established Rest of World markets was up 7 percent. Revenue in Emerging Markets was up 7 percent in the quarter, reflecting the impact of the loss of exclusivity for Crestor and Seroquel IR in Brazil and some delays in government tender orders in the Middle East region, which are now expected to be shipped in the fourth quarter.
Core operating profit in the third quarter was $3,177 million, a 2 percent decline that is in line with the decline in revenue. Core gross margin was higher than last year, which included an intangible asset impairment related to lesogaberan. Expenditures in SG&A were down 2 percent, as efficiency gains more than offset investment in Emerging Markets and launch products and the excise tax related to US healthcare reform measures. Core R&D expense was up 10 percent on increased spending on late stage clinical trials and biologics partially offset by efficiency gains. Reported operating profit increased by 78 percent, which includes $1,483 million of other income from the sale of Astra Tech, which was excluded from Core earnings. Lower legal provisions compared with the third quarter last year also benefited the growth rate in reported operating profit in the quarter.
Core earnings per share in the third quarter were $1.71 compared with $1.50 in the third quarter 2010, a 12 percent increase. Core earnings per share benefited from the lower number of shares outstanding as a result of net share repurchases, a lower tax rate and lower net finance expense compared with last year. Reported earnings per share in the third quarter were $2.56, up 140 percent, as a result of the non-taxable profit on the sale of Astra Tech and lower legal provisions compared with the third quarter 2010.
David Brennan, Chief Executive Officer, said: "We have delivered a third quarter revenue and Core earnings performance in line with our expectations, against the backdrop of anticipated generic competition and government price interventions. Our disciplined execution continues to generate strong cash returns, with dividends and net share repurchases well ahead of last year. We have also increased our Core EPS target for the full year."
About AstraZeneca
AstraZeneca is a global, innovation-driven biopharmaceutical business with a primary focus on the discovery, development and commercialisation of prescription medicines for gastrointestinal, cardiovascular, neuroscience, respiratory and inflammation, oncology and infectious disease. AstraZeneca operates in over 100 countries and its innovative medicines are used by millions of patients worldwide.