May 17, 2018 / 11:21 PM / 8 months ago

UPDATE 2-CSL becomes Australian top 5 firm as profit outlook sends shares surging

* CSL sees annual net profit seen between $1.68 bln and $1.71 bln

* Second profit upgrade in three months

* Shares hit record high, making CSL Australia’s 5th biggest firm (Recasts and writes through with analysts’ comments)

By Byron Kaye

SYDNEY, May 18 (Reuters) - Australian pharmaceutical firm CSL Ltd lifted its profit outlook for the second time in three months on Friday, spurring its shares to a record high and making it one of the country’s five biggest corporations by market value.

The higher profile for CSL, which is now worth some A$82 billion ($62 billion), also underscores waning fortunes for Australian lenders, which have been battered by an embarrassing inquiry into financial misconduct.

The plasma and vaccine specialist now outranks two of the country’s “big four” banks, Australia and New Zealand Banking Group Ltd and National Australia Bank Ltd.

CSL bumped up its annual net profit forecast to between $1.68 billion and $1.71 billion, compared with February guidance of $1.55 billion to $1.6 billion.

The company’s influenza vaccine unit, Seqirus, was “performing well following a severe northern hemisphere influenza season”, CEO Paul Perreault said in a filing.

The company created Seqirus by buying the vaccine unit of rival Novartis in 2014, but the deal left CSL with some costly research and development projects. The company has said the unit would become profitable this year.

“It looks as though the company is on track to deliver,” said Chris Kallos, a healthcare analyst at Morningstar, referring to Seqirus.

“They’ve got an R&D pipeline which leverages their basic raw material, which is plasma. This is only the tip of the iceberg,” Kallos added.

Shares in CSL, also the world’s second-largest influenza vaccine maker, jumped as much as 5 percent in morning trade while the broader market was slightly lower. The shares have gained 29 percent so far this year.

“People will always get sick, and the flu viruses have a very clever way of mutating, meaning that vaccines each year have to be upgraded ... and CSL is right at the forefront of that,” said James McGlew, executive director for corporate stockbroking at Perth-based broker Argonaut.

CSL also said it was experiencing stronger-than-expected sales of Idelvion, an injection to help hemophiliacs get blood clots, and Haegarda, a treatment for swelling attacks known as angiodema.

In contrast to CSL’s share rally, NAB has tumbled 7 percent for the year to date while ANZ has lost nearly 2 percent. (Reporting by Byron Kaye in Sydney; Additional reporting by Chris Thomas in Bengaluru; Editing by Edwina Gibbs)

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