There is no way around it; AstraZeneca announced dreadful first quarter results.

First quarter revenues came in well below market expectations, falling 11 per cent to $7.35bn, short of consensus forecasts of $7.95 billion - the average of 21 estimates compiled by Bloomberg.

Pre-tax profits fell a massive 38 per cent to $2.05bn, with earnings per share also down 38 per cent from $2.08 to $1.28.

The company highlighted challenging market conditions together with the anticipated impact from the loss of exclusivity on several brands behind the fall, which is exactly what many analysts have been fearing for a while as the benefits of some patents have come to an end, whereas there is currently nothing much to counter this.

Nevertheless, AstraZeneca remains strongly cash-generative thanks to its multi-year cuts strategy. It also has promised to return value to shareholders through a progressive dividend policy - just re-confirmed by its new interim CEO - and share buyback programme.

AstraZeneca has not cancelled its intention to increase the dividend while maintaining cover at two times (50% of underlying earnings). Dividends have been well covered by earnings in recent years, so, while the company is one of only few FTSE100 listed companies with substantial net cash, and, with earnings per share stagnating, while share-backs continue apace, there is a chance that 2012 dividend forecast of 181 pence may be paid out.

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