AstraZeneca posts strong sales and earnings but announces 3,000 job cuts

Anglo-Swedish pharmaceutical major AstraZeneca had a busy start to February, announcing much improved 2006 fourth-quarter and full-year sales and earnings, as well as the acquisition of Arrow Therapeutics and two licensing deals to expand its product pipeline (Marketletter February 5), but surprised the markets by also revealing plans for 3,000 job cuts (4.6% of the current workforce) over the next three years, as a part of the firm's $500.0 million revamp of its supply chain and aimed at boosting productivity and achieving savings.

Nevertheless, there was a positive reaction, with the company's shares rising 2.2% to L29.03 on the day of the press conference, February 1, with investors also encouraged by chief executive David Brennan issuing forward guidance (something that AstraZeneca has not done traditionally), saying that he expects sales revenue growth in the high single digits and setting a target for earnings per share of $3.80-$4.05 for 2007.

2006 pretax profit rises 28%