Shares in Roche Holding have dropped as the Swiss pharmaceutical giant reported lower sales for the first nine months and warned of a larger impact from currency movements than previously predicted.

Sales Decline

Roche Holding's sales for the first nine months of the year fell by 6% to 44.05 billion Swiss francs ($49 billion), causing concern among investors. This has led to a 3.2% decrease in Roche's shares, which were trading at CHF241.65 as of 0911 GMT on Thursday.

Outlook and Guidance Disappointment

Although Roche confirmed its outlook for 2023, expecting a decline in sales in the low single percentage digit range, investors found it underwhelming. Jefferies analysts noted that a modest guidance upgrade had been widely anticipated, making the lack of an improvement disappointing for many.

Currency Impact on Bottom Lines

Roche now predicts that if exchange rates remain unchanged until the end of the year, its bottom lines will be negatively affected more than previously expected. The currency impacts are estimated to result in declines of 7% in sales, 10% in core operating profit, and 12% in core earnings per share (EPS). In contrast, the previous forecast in July anticipated currency impacts of 9% for core operating profit and 10% for core EPS.

Analyst Expectations

Stifel analyst Eric Le Berrigaud suggested that with the currency impact and other factors taken into account, Roche's core EPS could decrease by approximately 15% to CHF17.25. However, analysts polled by FactSet forecasted Roche's 2023 adjusted EPS at CHF18.56.

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