UPDATE 1-AstraZeneca lifts 2008 outlook as Q2 tops forecast

(Adds shares, analyst, CEO comment)

By Ben Hirschler

LONDON, July 31 (Reuters) - Drugmaker AstraZeneca Plc (AZN.L), enjoying a favourable tailwind from currencies, lifted its full-year earnings forecast on Thursday as second-quarter results came in ahead of expectations, boosting its shares.

A 9 percent increase in sales and 7 percent in "core" earnings per share (EPS) in the three months to end-June was helped by a weak dollar, the group's reporting currency.

Cholesterol fighter Crestor, schizophrenia drug Seroquel and Symbicort for asthma were key drivers, offsetting slowing revenues from top-seller Nexium, for acid reflux, which is suffering price competition from cheaper rivals.

For the full year, the Anglo-Swedish drugmaker said it now expected core EPS of between $4.60 and $4.90, against $4.45-4.75 anticipated previously.

Many analysts had forecast a raised outlook, which followed an upgrade in April, but the increase exceeded expectations of around 5 cents, fuelling a rally in the stock.

"We've had a marked turnaround (in the share price) largely due to the fact that guidance has been increased by 15 cents ... it's very positive," said Charles Stanley analyst Jeremy Batstone-Carr.

AstraZeneca shares reversed earlier losses to stand 3.8 percent higher at 24.80 pounds by 1040 GMT.

Reported pretax profit in the quarter rose 14 percent to $2.28 billion on sales of $7.96 billion, equivalent to core EPS of $1.25 versus analysts expectations of $1.13.

"Core" earnings exclude restructuring costs and charges related to last year's acquisition of MedImmune.

AstraZeneca shares trade on around 10 times forecast 2009 earnings -- below British rival GlaxoSmithKline Plc (GSK.L) on 11.5 times -- reflecting investor concern about the company's relatively thin late-stage drug pipeline.

But the stock has rallied around a third since March as it has seen off immediate generic threats to both Nexium and Seroquel.

"The business is on track ... in addition, we have mitigated the biggest near-term financial risks with the Nexium patent settlement and the successful summary judgement motion for Seroquel," said Chief Executive David Brennan.

Brennan said the company's pipeline of new drugs was making good progress, although filing of cancer drug Zactima is now expected to occur in the first half of next year, later than expected, as a result of a slowdown in event rates in clinical trials. (Reporting by Ben Hirschler, Editing by Mark Potter and Erica Billingham)