AstraZeneca is asking for patience. CEO David Brennan wants investors to hang in with the company through what may be "a period of fluctuating earnings." This in the wake of fourth-quarter profits that fell short of estimates--and perhaps even more so, a sales forecast that didn't call for much growth until 2014.
But Brennan's not asking for favors empty-handed. The company is reinstating share buybacks, with plans to shell out as much as $1 billion on the program this year. Plus, AstraZeneca raised its annual dividend by 12 cents. They're carrots designed to persuade investors to stick around while Brennan and company stick to their knitting on branded drugs.
"Don't judge us based on earnings," Brennan said in an interview with Bloomberg. "We have patent expirations coming, we have to deal with that. We are not going to decrease our dividend because our earnings go down. Right now that's a 4.5 percent or 5 percent yield on the stock. Investors would look at that and say, ‘these guys aren't as concerned about earnings, they're concerned about cash generation and returning cash to shareholders.'" Will shareholders listen?
- read the Bloomberg piece