Novo Nordisk A/S share price down, posts an 8% first-quarter net profit increase, but lowers sales and profit forecasts

The worlds largest insulin manufacturer – Novo Nordisk A/S – made an official statement today, announcing that it narrows its projection for the sales and profit in the current financial year due to rising competition and a loss of one of its distributors in the US.

According to Novo Nordisk’s statement, the sales over the first three months of the current financial year jumped 2% from 19.98 billion for the same period in 2013 to 20.34 billion Danish kroner due to new-generation insulins the company added to its product range. The result came below analysts expectations of 20.91 billion kroner.

According to the investment Chief of PFA – Mr. Jesper Langmack – the first-quarter performance of Novo Nordisk was poised to be the lowest one “in a long time”. As reported by Bloomberg at the end of 2013, Mr. Langmack then said that a single “soft set of results won’t change much for a long-term investor like us, but it may prompt some short-term investors to sell”. The investment fund of Mr. Langmack possessed about 4 billion kroner of the Novo stock at the end of last year.

The company reported an 8% net profit increase over the first quarter of 2014, reaching 6.46 billion Danish kroner (1.2 billion dollars) from 5.98 billion kroner a year earlier. The result outstripped analysts’ estimates of 6.34 billion kroner.

The performance of the company was affected by the strong Danish krone and the lower demand for two of its diabetes drugs – Victoza and NovoLog – Novo announced today.

The company also said that its sales for the full 2014 are expected to increase by about 10% in local currencies and by about 5.5% in Danish kroner. This forecast is lower than the one the company posted in January 2014, which amounted to an 11% and a 7.5% increase respectively.

Novo Nordisk A/S lost 0.99% to trade at 240.30 Danish kroner per share by 13:15 GMT, marking a one year change of +23.10%. According to the information published on the Financial Times, the 26 analysts offering 12 month price targets for Novo Nordisk A/S have a median target of 262.00, with a high estimate of 330.00 and a low estimate of 171.00. The median estimate represents a 7.95% increase from the last price of 242.70.