Sanofi chief's latest growth promise: Q4 will bring it

Sanofi CEO Chris Viehbacher

Sanofi CEO Chris Viehbacher has been talking about a return to growth for some time now. It's sort of the boy who cried wolf, but in reverse. Viehbacher hasn't been warning of a threat, he's been promising a boon.

This time, Viehbacher tells Bloomberg that the fourth quarter of 2013 is the magic period. But analysts are skeptical that he can deliver. "The question is credibility," Barclays analyst Michael Leuchten told the news service. "In the past he has not quite made guidance. He promised to double his vaccines revenues and emerging markets revenues, and that didn't happen."

Let's review Viehbacher's recent predictions. About a year ago, Viehbacher saw "the light at the end of the tunnel," with the company's ($SNY) growth areas building steam. In May of this year, when he predicted growth returning during the second half of this year: "We are in the last quarter of the patent cliff. ... [T]he future of the company [is] particularly exciting." August, when Sanofi cut its earnings forecast: We still expect growth to return during the second half of the year.

Announcing second-quarter earnings, Viehbacher did admit to "a few speed bumps" on Sanofi's route to that growth. Those emerging markets revenues? Down 2.3%, largely because of an inventory snafu in Brazil (where top execs were dismissed, incidentally). Overall, net sales were down by 9.8%, to €8 billion, and net income dropped 23.4%. And that followed a 34% decline in profits for the first quarter.

At the time, Leuchten called the Q2 numbers "shocking." Leerink Swann's Seamus Fernandez was a bit less dramatic--"disappointing" was his word--but his firm subsequently rethought its expectations for Sanofi's 2013 results.

The reasons for the sales and profits slide are familiar--patent expirations for major drugs, including its once-top-selling Plavix. And that's where Viehbacher is hanging his latest promises. As he has previously said, Sanofi has navigated its worst patent-cliff losses already. In a sense, there's nowhere to go but up. Viehbacher's Q4 growth promise suggests that Q3 didn't deliver. As Bloomberg notes, analysts weren't expecting it to; forecasts put the French drugmaker's Q3 earnings at 5% lower than last year's--and Q4's on a 21% increase.

Whether Viehbacher's latest promise applies to sales or profits isn't clear, Bloomberg says. If it's profits, then analysts seem to think he has it covered. Sales, maybe not so much. Long term? The outlook among market-watchers seems more positive.

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