NVO Novo Nordisk

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)

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