* Q3 sales down 6.7 pct, EPS down 19 pct
* Sanofi says now sees 2013 EPS down about 10 pct
* Sales growth in China slows to 5 pct from 15 pct in Q2
* Sanofi sees return to growth in Q4
* Shares erase losses, up 2.4 pct
(Recasts with detail, analyst comments, share move)
By Natalie Huet
PARIS, Oct 30 French drugmaker Sanofi
lowered its 2013 profit guidance for a second time after a
slowdown in China, weaker generic sales in Brazil and
manufacturing problems at a Toronto vaccine plant dented
Sanofi said it now expected full-year earnings per share
around 10 percent lower than in 2012 at constant exchange rates,
having previously signalled a 7-10 percent drop.
However, Chief Executive Chris Viehbacher told reporters
that the problems encountered during the quarter were largely
one-offs that the company had now put behind it.
"We're confident about being able to get back to growth in
the fourth quarter," he said on a conference call.
After opening 2 percent lower, Sanofi shares were up 2.4
percent at 1040 GMT, outperforming the Euro Stoxx Healthcare
Index and giving Sanofi a market value of around 102
billion euros, the second-biggest on France's blue-chip index
behind oil major Total.
Analysts noted that while vaccines and emerging markets had
weakened, Sanofi's diabetes and Genzyme rare diseases businesses
continued to post double-digit growth. They said the company,
with most of the impact of lost patents now behind it, was ready
for a recovery in profit.
"Overall, a weak quarter, yet the company returns to a
period where growth should be steady and comparatively strong
versus many peer companies," Bernstein analyst Timothy Anderson
wrote in a note.
PRESSURE IN CHINA
Anderson said Sanofi's performance in emerging markets, and
particularly in China, was clearly on the weak side, mirroring
problems faced by other drug companies in the quarter.
A crackdown on Big Pharma's sales practices in China,
increased government pressure on drug prices from Asia to Latin
America, and weakness in emerging market currencies are acting
as a reminder that growth in those regions remains volatile.
Britain's GlaxoSmithKline said last week its sales
in China had dropped 61 percent in the third quarter, hit by a
bribery scandal that made doctors wary of seeing drug
Sanofi's sales in China - which last year accounted for less
than 4 percent of group revenue but posted the strongest growth
- rose 5 percent in the third quarter. In the three months to
the end of June, before the scandal, growth was 15 percent
"There have been investigations ongoing and this creates
some confusion in the market place. We are seeing a progressive
return to normal circumstances," Viehbacher said, noting that
sales were improving month on month.
Worldwide, Sanofi's sales fell 6.7 percent to 8.432 billion
euros ($11.61 billion) in the third quarter, generating earnings
per share (EPS) of 1.35 euros, down 19 percent.
Analysts polled by Thomson Reuters I/B/E/S on average had
forecast sales of 8.55 billion euros and EPS of 1.43 euros.
Business net income, which excludes items such as
amortisation and legal costs, declined 18.7 percent to 1.789
Vaccine sales fell 7.2 percent following the manufacturing
problem at Sanofi's Toronto plant that held back batches of
paediatric vaccines destined for the U.S. market.
Viehbacher said the problem had been resolved, shipping had
restarted and Sanofi did not expect any future impact. The
company added that it expected a record flu season in the
northern hemisphere in the second half.
Generic drug sales were down 5.4 percent due to the
lingering impact of inventory issues in Brazil in the previous
Sanofi's earnings have suffered from the loss of patents on
some of its best-selling drugs, including blood thinner Plavix.
Since taking the helm four years ago, Viehbacher has sought
to replenish its pipeline, acquiring U.S. biotech firm Genzyme
in 2011 to develop treatments for rare diseases and partnering
with Regeneron on a new cholesterol drug.
The company said sales trends had gradually improved in
Western Europe over the year. Excluding currency effects, which
slashed 7.3 percentage points off revenue growth, global sales
were up 0.6 percent, growing for the first time in five
($1 = 0.7262 euros)
(Editing by James Regan and Mark Trevelyan)