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Sanofi's Profits Rise in 4th Quarter

- By Alberto Abaterusso

Sanofi SA (SNY) reported fourth-quarter and full-year 2018 earnings before the opening bell on Thursday.

The French health care major posted business earnings of 1.10 euros ($1.25) per share for the last quarter of 2018, reflecting 4.7% year-over-year growth at constant exchange rates.

Driven by strong performance in the rare disease unit Genzyme, revenue came in at 8.997 billion euros, growing 3.9% year over year at constant exchange rates .

By segment, sales in the pharmaceutical business increased 3% from the prior-year quarter to 6.276 billion euros, including 2.054 billion euros from Genzyme, 1.17 billion euros from diabetes and cardiovascular and 3.052 billion euros from general medicines and emerging markets. Genzyme grew 37.4%, while diabetes and cardiovascular dropped 11.3% and general medicines and emerging markets declined 6.6%.

Sales in the consumer health care business increased 1.9% to 1.194 billion euros.

Vaccine sales jumped 9.7% to 1.527 billion euros.

Sanofi recorded the following performances for its key products. Sales of Lantus, which is a blood sugar controller, decreased 19.7% to 866 million euros. Sales of Lovenox, which is used to treat or prevent thrombosis, declined 9% to 346 million euros. Plavix sales, which is prescribed for lowering the risk of a stroke, dropped 4.9% to 328 million euros. Sales of Aubagio, which is used to treat relapsing multiple sclerosis, increased 12.6% to 446 million euros. Toujeo, which is used to lower the levels of sugar in the blood, saw sales decline 2.3% to 211 million euros. Sales of Myozyme-Lumizyme, which are used to treat Pompe disease, grew 10.7% to 226 million euros. Cerezyme, which is used to treat Gaucher disease, saw sales jump 9.3% to 190 million euros. Sales of Fabry disease treatment Fabrazyme increased 14.4% to 206 million euros. Sales of eczema and asthma therapies based on Dupixent were 280 million euros and sales of haemophilia removing factor Eloctate were 196 million euros.

For full fiscal 2018, Sanofi posted business earnings of 5.47 euros per share, which were backed by total revenue of 34.463 billion euros. Business earnings increased 5.1% year over year and total revenue climbed 2.5% year over year, both at constant exchange rates.

Looking ahead, the French drug manufacturer aims to achieve 3% to 5% business earnings growth at constant exchange rates in full-year 2019. It is depending on ongoing sales growth from Dupixent and in offsetting diabetes patent expirations with the launch of new products. As part of this action, Sanofi's Cablivi was approved on Wednesday by the Food and Drug Administration for the treatment of an autoimmune disorder called acquired thrombotic thrombocytopenic purpura.

The stock was trading around $43.39 at close on Wednesday for a market capitalization of approximately $107.61 billion.

The stock is flat so far this year and has underperformed the S&P 500 exchange-traded fund by about 9% and the Nasdaq ETF by 11%.

The 52-week range is $37.43 to $45.62.

The price-book ratio is 1.66 versus an industry median of 2.64, the price-sales ratio is 2.68 versus an industry median of 3.1 and the price-earnings ratio is 27.72 versus an industry median of 23.77.

Sanofi has paid dividends for 15 years. It is currently granting a forward dividend yield of 4.27% compared to an industry median of 1.66%.

During the final three months of 2018, Ken Fisher (Trades, Portfolio) increased his holding by 2.65% to 16,041,052 shares.

Disclosure: I have no positions in any securities mentioned in this article.

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This article first appeared on GuruFocus.