CSL Ltd. (CSL), the world’s second-biggest maker of blood-derived therapies, fell the most in more than three months in Sydney trading after saying profit will grow more slowly this fiscal year than last.
CSL dropped as much as 4.6 percent, headed for the biggest decline since May 8, to A$64.70. Profit will increase 10 percent in the 12 months ending June 30, compared with 19 percent growth the previous year, the Melbourne-based company said in a statement today.
Paul Perreault, who succeeded Brian McNamee as chief executive officer on July 1, said the company is considering extending share buybacks amid a slowdown in key markets, even as CSL increases expenditure on research by about 13 percent to complete clinical studies on various blood products.
“Looking into 2014, we see trading conditions being tempered again by ongoing economic pressures,” Perreault said in the statement. “The board will consider new capital management initiatives which may include a further on-market share buyback program of a similar amount to the current program.”
CSL traded 3 percent lower at A$65.75 at 11:29 a.m., paring its gain this year to 22 percent. That’s double the increase of the S&P/ASX 200 Index, which gained 0.03 percent today.
Per-share earnings will increase at a faster pace than total net income because of CSL’s A$900 million share buyback program, which is 97 percent completed.
Announcements of share buybacks have been a precursor to stronger earnings in the past, said Andrew Goodsall, a health-care analyst at UBS AG, in a note to clients after the results were announced today.
Net income rose to $1.22 billion, or $2.43 a share, in the 12 months ended June 30, matching the average estimate of 11 analysts. CSL had profit of $1.02 billion, or $1.97, a year earlier. Revenue increased 6.6 percent to $5.13 billion, it said.
The forecast for the current year was based on constant exchange rates, according to the statement.
Sales of Hizentra, injected by patients under the skin at home, jumped 27 percent, helping buffer currency fluctuations that eroded earnings by $18 million.
CSL is evaluating its non-plasma businesses in a process that could take as long as two years, Perreault said in a March interview. It created a new unit, named bioCSL, in January to encompass its vaccine, pharmaceutical and diagnostics units in order to identify profitability, he said.
The company switched to reporting in U.S. dollars from Australian currency earlier this year.
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