CSL shares drop on higher costs
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More news: Shares in CSL dropped 3.2% to $298.92 despite the biotech company lifting full-year profit and dividends, led by a strong performance in its core immunoglobulin division, with the market disappointed by higher costs.
RBC Capital Markets analyst Craig Wong-Pan said while the company delivered revenue slightly ahead of consensus forecasts and a better-than-expected gross margin, this was offset by higher operational expenses, while the management’s guidance of FY underlying profit ended up being a slight miss to market expectations.
"We believe the market will likely view the FY24 numbers as slightly disappointing given the higher than expected opex. While the market was likely anticipating conservative FY25 guidance, we suspect the NPATA guidance will still be viewed as weaker than expected," Pan said.
RBC has a 'sector perform' recommendation on the stock, with a $319 price target.
CSL lifts dividend after full-year profit jump
The news: Biotech giant CSL has reported a jump in full-year profit, led by a strong performance in its main CSL Behring business, helping it lift dividends.
The numbers: Statutory net profit for the year to 30 June rose 20% to USD2.64 billion ($4 billion). Underlying net profit adjusted for currency fluctuations was up 11% to $2.91 billion, marginally lower than analysts estimates of USD2.92 billion. Revenue for the year was also up 11% to USD14.8 billion.
The company will pay a final dividend of USD1.45 a share, up from USD1.29 a share a year ago.
The context: The blood products company saw strong sales at its core immunoglobulin division, driven by significant patient demand, with sales jumping 20%. The plasma business continued to see momentum in collections resulting in the cost per litre reducing further.
Sales at the Seqirus vaccine business were driven by the adjuvanted influenza vaccine, while the Switzerland-based Vifor Pharma, which CSL acquired last year, saw its volume of iron continue to grow in European markets.
The group is targeting revenue growth of 5% to 7% for FY25, with underlying profit expected to be in the range of USD3.2 billion to USD3.3 billion at constant currency, representing growth of 10% to 13%.
What they said: "Our largest franchise, the immunoglobulins portfolio, delivered exceptional growth driven by significant patient demand and the recovery in CSL Behring’s gross margin is progressing to plan," chief executive Paul McKenzie said.
The sources: ASX announcement, RBC Capital research
