Novo Nordisk Shares Dive on Lower Forecast
October 28 2016 - 5:00AM
Dow Jones News
Shares in Novo Nordisk A/S plummeted Friday as the Danish
pharmaceutical company slashed its long-term growth target, despite
reporting a forecast-beating 17% rise in third-quarter net
profit.
The company reduced its long-term guidance and narrowed its
sales and operating profit outlook for 2016 due to a difficult U.S.
market.
Its shares were trading 15% lower Friday morning.
It now expects 2016 sales growth of 5% to 6% from earlier
guidance of 5% to 7%, and operating profit growth of 5% to 7% from
5% to 8%, both measured in local currencies.
The preliminary outlook for 2017 indicates low single-digit
growth in sales and flat to low single-digit growth in operating
profit, in local currencies, it said.
"In terms of long-term financial targets, Novo Nordisk no longer
deems it achievable to reach the operating profit growth target of
10% set in February 2016," it said. "As a result, the target has
been revised and Novo Nordisk is now aiming for an average
operating profit growth of 5%."
In a further move to become more competitive, the pharmaceutical
firm said it has revised its R&D strategy and priorities, and
won't progress its current development projects within oral insulin
and related combinations.
Net profit for the three months ended Sept. 30 rose to 9.8
billion Danish kroner ($1.44 billion) from 8.38 billion kroner in
the same period last year. Analysts polled by FactSet had expected
net profit of 9.46 billion kroner.
Sales rose to 27.54 billion kroner from 26.79 billion kroner in
the year-earlier period, missing analysts' expectations of 28.01
billion kroner.
Write to Dominic Chopping at dominic.chopping@wsj.com
(END) Dow Jones Newswires
October 28, 2016 04:45 ET (08:45 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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