As Sanofi prepares to release third-quarter results—after a tough summer for its share price—the company says it expects a major boost from exchange rate changes.
In a new memorandum, the company said it expects the stronger U.S. dollar to provide a 10% to 11% tailwind to third-quarter revenues. As for earnings per share over the period, the company expects a 12% to 13% boost from currency changes.
Even though Sanofi reports its financials in euros, the company does a significant chunk of its business in the United States. So when the company translates those U.S. sales back to euros, it's realizing a sizable currency boost.
During the span of this year, the euro has declined from $1.14 to $0.96, a 16% decrease.
These issues aren't exclusive to Sanofi. Following this trend, other European Big Pharmas may see a third-quarter boost when they report their results in the coming months. Alternatively, U.S. companies will likely see a currency hit when they convert foreign sales back into dollars.
Sanofi's third-quarter results will likely be watched closely after the company's rough summer. Thanks in part to worries about the ongoing Zantac litigation, Sanofi's share price has declined by nearly 30% since the start of June.
But it's not all bad news for the drugmaker. The company has a massively successful drug launch underway in Dupixent, which is on its way to reaching 13 billion euros in peak sales, executives have said. Meanwhile, Sanofi also expects another "record year" for its flu vaccine franchise. And in consumer healthcare, Sanofi expects its key brands to outgrow the larger market in certain countries.
Sanofi reports third-quarter results on October 28.
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