AstraZeneca additionally raised its 2011 earnings target after also securing a lower tax rate and being able to free up some of the $2.3 billion it had set aside as tax provisions, it said in a group statement.
The company said it would release some of the excess provisions, resulting in a net gain to the company’s first-quarter earnings of $500 million.
AstraZeneca added that it was now targeting full-year core earnings per share of up to $7.20 from a previous estimate of $6.75, according to the statement.
Resolution of the tax dispute came after British and US government fiscal authorities agreed to the terms of a pricing agreement for AstraZeneca’s US business for a 13-year period from 2002 to the end of 2014.
AstraZeneca added that it had reached agreement with the US tax authorities on a related valuation matter arising on integration of its US businesses in 2000 after the 1999 merger of Swedish group Astra and British company Zeneca.
“Based on these agreements, AstraZeneca now expects to pay a net amount of $1.1 billion to resolve all US transfer pricing and related valuation matters for all periods from 2000 to the end of 2010,” the group said in its statement.