AstraZeneca reported first-quarter results that exceeded our expectations, buoyed by stronger-than-expected sales from cardiovascular drug Toprol and a tax gain. However, we don't expect any changes to our fair value estimate based on these one-time gains. Excluding the impact of foreign exchange rates, sales and earnings per share increased 7% and 23%, respectively, year over year. Additionally, the company increased its 2010 earnings per share forecast to $6.05-$6.35 from $5.75-$6.15. Given the strong quarter, we expect Astra to meet its raised guidance.
Statin Crestor drove the company's overall growth with 27% year-over-year operational growth, which exceeded our expectation. On the basis of new indications in heart disease approved by the Food and Drug Administration in early 2010, we will probably increase our long-term projections for Crestor. The company's other best-selling drug, Seroquel for neuroscience indications, posted 13% operational year-over-year growth. We expect Seroquel's growth will moderate as the drug approaches generic competition in 2011. Further, we believe generic manufacturers of Toprol will come back on line later in 2010 and quickly erode Toprol's market share.
Astra is gaining traction in improving efficiency. As a percentage of total sales, marketing and administrative costs fell 200 basis points from the prior-year period. Also, Astra's tax rate fell close to 700 basis points year over year. However, we believe this is a one-time event based on a tax settlement with UK tax authorities, and we are surprised Astra kept the gain in its "core" earnings per share.
Damien Conover, CFA is a senior equity analyst for Morningstar.