Why did the CSL share price outperform the ASX 200 in February?

The healthcare giant produced healthy outperformance in February.

Key points
  • CSL shares have managed to outperform the ASX 200 in February
  • The ASX healthcare share reported its HY23 result, showing 10% underlying net profit growth
  • CSL is expecting to generate underlying net profit of between $2.7 billion to $2.8 billion in FY23

The CSL Limited (ASX: CSL) share price managed to beat the return of the S&P/ASX 200 Index (ASX: XJO) during February 2023.

As of midday trading, CSL shares were flat for the month, while the ASX 200 Index had dropped around 3%.

The difference in performance may be explained by two factors.

On the ASX 200 side of things, there has been a sizeable decline in the share prices of some of the largest ASX blue chips, which has an outsized impact on the index.

For example, BHP Group Ltd (ASX: BHP), Commonwealth Bank of Australia (ASX: CBA), and Rio Tinto Limited (ASX: RIO) have all seen their share prices drop, which has pulled the ASX 200 lower.

CSL released its FY23 half-year result mid-month, which investors are likely to have taken into account when considering the CSL share price.

Let's have a look at some of the numbers.

Two happy scientists analysing test results.

Image source: Getty Images

Earnings recap

CSL likes to tell investors its numbers in constant currency terms so that they are more easily comparable to the last result. This makes it much clearer in the case of foreign exchange rates causing any rise or fall.

The ASX healthcare share reported that revenue increased by 25% in constant currency terms, while underlying net profit after tax (NPAT) increased by 10% to $1.82 billion.

CSL reported strong growth of immunoglobulin and albumin sales, as well as record levels of plasma collections. It also revealed strong growth in its "market leading" haemophilia product IDELVION and "key speciality product" KCENTRA.

It also said its influenza vaccine business, CSL Seqirus, achieved "strong performance".

The ASX healthcare share noted the successful closure of its Vifor acquisition – it achieved around 15% revenue growth, with integration well underway and cost synergies on track. Vifor provides CSL with "leadership across an attractive portfolio focused on renal disease and diseases of iron deficiency".

CSL also noted a licence agreement for late-stage self-amplifying mRNA vaccine technology.

The dividend declared was US$1.07 per share and, in Australian dollar terms, it was A$1.55 per share, up 9%.

Did the outlook impact the CSL share price?

Investors are often forward-looking, so what the company has to say about its outlook could have a major impact on market sentiment. It didn't seem to be much of a surprise to the market.

The strong growth in plasma collection and immunoglobulins "is expected to continue", CSL said.

The company is also planning to launch HEMGENIX in the US, which it said would change people's lives. Management also said that the rest of its research and development pipeline is in "great shape".

CSL Seqirus continues to perform "strongly" and will deliver "another profitable year", though a loss is expected in the second half because of the seasonal nature of the business.

The company's underlying net profit is expected to be between $2.7 billion to $2.8 billion at constant currency.

CSL share price snapshot

While CSL shares were flat for February 2023, they are up more than 5% in 2023 to date.

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended CSL. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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