CSL’s healthy result

CSL's healthy result

CSL maintains forecast for 24% earnings growth

Mike King

Mike King is a Fool.com.au Investment Analyst and Writer. He caught the investing bug more than a decade ago, at a time when the U.S. had invaded Iraq and fear reigned in the markets. His initial success as the markets took off encouraged his passion and thirst for knowledge. With 13 years behind him at one of Australia's largest domestic banks, Mike's passion for stocks led him to join a boutique funds management firm, where he stayed for four years. A seven-year stint in equity research at one of the largest investment banks in the world followed that, giving Mike a thirst to pursue his passion further. Mike holds a Diploma in Applied Finance and Investment and a Graduate Certificate in Financial Planning. His passion is to help retail investors invest better, and that passion was one of his primary reasons for joining The Motley Fool Australia in late 2011. Mike has written thousands of articles since joining, including for Fairfax Media, Yahoo!7, Ninemsn and has also appeared on ABC's The Business. You can see all of Mikes' holdings here

Published February 13, 2013 11:15 am AEDT

Australia's largest pharmaceutical company, CSL Limited (ASX: CSL) with a market cap of more than $29 billion, has reported a 24% rise in first-half profits as demand for its blood products soars. Net profit came in at US$627 million, while earnings per share jumped 30% to SU124.7 cents, thanks to the effect of the company's ongoing share buyback.

Showing that the company is also increasing its margins, and becoming more efficient, sales only rose 7% to US2.5 billion. CSL increased the interim dividend to 50 cents per share, unfranked.

Looking at specific product performance, immunoglobulin sales grew 10% to US912 million, while haemophilia product sales rose to US$542 million. Other human health sales climbed by 19% to US$518 million on the back of increased demand for plasma therapies and influenza sales.

Looking forward, the company expects to report profit growth of around 20% for the full 2013 financial year, barring any unforeseen variables. Earnings per share growth will exceed profit growth again, as the company is still only 21% of the way through a $900 million share buyback.

The company continues to invest in research and development, and has a number of studies underway, which if successful should continue to support high levels of growth.

Foolish takeaway

Australian pharmaceutical and healthcare companies continue to impress globally, including CSL, Cochlear Limited (ASX: COH), Acrux Limited (ASX: ACR) and Mesoblast (ASX: MSB). That shows the strength of our biotechnology industry, although not every company is guaranteed success.

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The Motley Fool's purpose is to help the world invest, better. Click here now for your free subscription to Take Stock, The Motley Fool's free investing newsletter. Packed with stock ideas and investing advice, it is essential reading for anyone looking to build and grow their wealth in the years ahead. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson. Motley Fool writer/analyst Mike King owns shares in CSL and Cochlear.

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