Novo Nordisk Upgrades 2014 Outlook

COPENHAGEN--Denmark's Novo Nordisk A/S (NOVO-B.KO), the world's largest maker of insulin, raised its guidance for sales and operating profit in 2014, as it posted a somewhat smaller than expected rise in fourth-quarter net profit.

Novo Nordisk said it now expects sales, measured in local currencies, to grow between 8% and 11% this year, while operating profit is expected to increase 10%. Measured in Danish Kroner, sales growth is expected to be around 4.5% to 7.5% and operating profit growth around 4.5%.

When presenting the 3Q figures in October, Novo Nordisk had foreseen high single-digit growth for both in 2014. It said the revision is due to continued robust performance for the portfolio of modern insulin and Victoza.

The company is proposing a 25% increase in its dividend to shareholders to 4.50 kroner ($0.82 cents) per share and said it could also buy back as many as DKK15 billion worth of shares within the next 12 months.

Novo Nordisk has in recent years benefited from growth in demand for insulin driven by an ageing population and obesity. The company has the U.S. as its largest market.

The company said sales in the fourth quarter increased 3.5% in DKK21.70 billion Danish kroner, and net profit rose 5.0% to DKK6.05 billion from DKK5.76 billion in the same period in 2013. Analysts had expected net profit of DKK6.27 billion during the period, according to a poll by Dow Jones Newswires and Factset.

The company's closely watched operating margin fell to 33.9% during the period from 36.1% a year earlier.

Chief Executive Lars Sorensen said he was pleased with the company's performance in 2013, but the year "also posed challenges" after the U.S. Food and Drug Administration denied immediate approval of Tresiba, Novo Nordisk's latest insulin drug. "The [FDA's] Complete Response Letter in the U.S. was a disappointment, but in markets where we have launched the product, performance has been encouraging," he said.

Write to Clemens Bomsdorf at [e-mail]

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