Third Quarter and nine Months Results 2010

Revenue for the third quarter declined by 2 percent at constant exchange rates (CER) to $7,898 million.

-Strong double-digit sales growth at CER for Crestor, Symbicort and Seroquel XR.

-Revenue in markets outside the US increased by 7 percent at CER, including a 14 percent increase in Emerging Markets.

-As expected, revenue in the US was affected by generic competition for Arimidex, Pulmicort Respules and Toprol-XL, as well as the absence of H1N1 pandemic influenza vaccine revenue that benefited the third quarter 2009.  US revenue was down 13 percent at CER in the third quarter.

Core operating profit in the third quarter was down 10 percent at CER to $3,231 million.

-With the impact from lower revenue being largely mitigated by operating efficiencies and higher other income, the decline in Core operating profit is chiefly the result of a net $285 million adverse movement in gross margin – an intangible asset impairment charge this quarter set against a favourable provision release last year.

Core EPS in the third quarter was down 10 percent at CER to $1.50.

Reported EPS in the third quarter was down 26 percent at CER to $1.08.   

-Restructuring costs and legal provisions were higher compared with the third quarter last year, with the largest impact arising from legal provisions totalling $473 million in the third quarter 2010 which are related to ongoing product liability litigation for Seroquel (see Note 5).   

Net cash distributions to shareholders for the nine months increased to $4,658 million through dividend payments of $3,361 million and net share repurchases of $1,297 million.

Core EPS target for the full year narrowed to the range of $6.50 to $6.65.

(Table included in attached PDF)

David Brennan, Chief Executive Officer, said:  “We remain firmly on track to achieve our full year financial targets. The third quarter performance featured double-digit revenue growth in Emerging Markets.  Revenue also increased in Western Europe and Established Rest of World.  As expected, the impact of generic competition on several products and the absence of pandemic flu vaccine revenue led to a challenging quarter in the US.”