Roche's fourth-quarter sales of diagnostics rise 4 percent, led by immunodiagnostics

Roche announced Thursday that fourth-quarter sales in its diagnostics division increased 4 percent year-over-year to 3.3 billion Swiss francs ($3.5 billion), with growth mainly coming from immunodiagnostics revenue. The company's overall sales climbed 5 percent to 13.9 billion francs ($14.9 billion).

Annual sales in the diagnostics division rose 5 percent to 12.1 billion francs ($13 billion), with the company's overall revenue up by the same percentage to 53.5 billion francs ($57.4 billion), in line with analyst estimates. Roche noted that net income last year slipped 9 percent to 8.8 billion francs ($9.4 billion), hit by impairments of goodwill and intangible assets.

Within the diagnostics division, Roche reported "strong growth" in emerging markets last year, with sales in China up 21 percent. Meanwhile, revenue in the Asia Pacific region gained 15 percent to 2.9 billion francs ($3.1 billion), Latin America rose 12 percent to 884 million francs ($952 million) and sales in the Europe, Middle East and Africa region lifted 3 percent to 4.8 billion francs ($5.2 billion). Further, the company noted that sales in North America were flat at 3 billion francs ($3.2 billion).

Roche said that sales in the centralised and point-of-care solutions segment grew 7 percent in the full year to 7.2 billion francs ($7.8 billion), led by immunodiagnostics, which gained 13 percent year-over-year. Sales in the molecular diagnostics business increased by 4 percent to 1.9 billion francs ($2 billion) and revenue rose by 11 percent in the tissue diagnostics business to 1 billion francs ($1.1 billion), which included a 13-percent rise in companion diagnostic sales.

Meanwhile, revenue from the diabetes care segment fell by 3 percent compared with 2016 to 2 billion francs ($2.2 billion), which Roche said was due to "continued US pricing and reimbursement pressures."

For the current year, the company predicts that sales are expected to grow in the stable to low-single digit range, on a constant exchange rate basis. Meanwhile, earnings per share are targeted to grow in the high-single digits, boosted by recent changes to tax laws in the US. Roche indicated that its tax rate will drop from 26.6 percent last year to the low 20s range in 2018.

CEO Severin Schwan said "the guidance reflects a lot of confidence. This confidence again is based on the strength of our portfolio and the success of new medicines."

Commenting on the results, UBS Group analyst Jack Scannell said the guidance "will settle the nerves," adding "what Roche have done is bounded uncertainty. They have suggested to markets that the worst end of the plausible range is very unlikely to happen."

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