Shares in blood products and vaccines giant CSL jumped by more than 12% yesterday after it surprised with a big earnings upgrade.
After running a conservative line on the prospects of an upgrade at the AGM late last year, investors took yesterday’s news and pushed the shares to $111.50 at the close.
That was thanks to the upgraded full-year profit guidance following strong sales, particularly of immunoglobulins and specialty products.
After a likely first-half profit of about $US800 million, CSL expects net profit for the year ending June 30 to grow by between 18% 20% on a constant currency basis.
“Following strong sales performance, particularly by immunoglobulins and specialty products in the most recent financial quarter, CSL expects to report net profit after tax of approximately $US800 million ($1.07 billion) for the six months ended 31 December 2016,” the company told the ASX.
The result includes a $US20 million headwind from unfavourable currency fluctuations.
CSL added that its large-scale manufacturing operations enabled it to respond swiftly to changing conditions, with the group consequently benefiting immediately from “atypical market activity” in the second quarter.
The company said it would provide a further update at its half-year results on February 15.
After a strong couple of years, CSL was among the hardest hit by the result of the November US election, sliding 12% in a month as investors moved away from defensive stocks.
It has since recovered most of those losses and up to the close Wednesday was down 1.5% for the year to date. No longer, its shares are now up 10%.
That compares to its previous guidance of 11% growth after adjusting for the one-off gains and costs associated with its $US275 million acquisition of the Novartis influenza vaccines business.
That deal, completed in August 2015, made CSL the second biggest flu vaccines supplier in the world behind French drug maker Sanofi.
Novartis’s operations were integrated into CSL’s existing vaccines division, which now operates as Seqirus.
