French pharmaceuticals firm Sanofi raised on Monday its earnings outlook for the year after sales climbed in the second quarter despite a decline for a major diabetes drug. The company said it now expects earnings per share from continuing activities to be "broadly stable" at constant exchange rates this year, compared to its previous guidance of a drop of up to 3 percent.
Using this measure, earnings were up 2.7 percent during the April-June period. Investors welcomed the measured optimism from the company, pushing its shares up by 1.6 percent in midday trading while the Paris stock exchange's CAC 40 index was flat overall. Net profit fell during the second quarter, however, dropping by 10.4 percent to 1.0 billion euros ($1.17 billion) due to writing down the value of assets, restructuring costs and acquisitions.
Sales rose by 6.4 percent, or by 0.6 percent when exchange rates are held constant, to 8.7 billion euros. The increase was due to better performance by the speciality care unit Sanofi Genzyme and its vaccine business Sanofi Pasteur. The main drag continued to be diabetes treatments, with sales falling by 12.2 percent, as Sanofi's Lantus insulin no longer being reimbursed by several top US health insurance companies which have switched to a cheaper competitor.
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