CSL (ASX: CSL) results on Tuesday were OK but not great.

Earnings came in line with expectations while profit beat thanks to cost reductions. The company kept guidance unchanged but currency forecasts now see the USD ending the year higher than the company's forecasts. Resulting in an ~85m headwind. Out of the three major segments, Behring, Seqirus and Vifor, only Behring saw earnings growth (a solid 17%) with the blood plasma side of things. The latter two’s underperformance was attributed to lower immunisation rates, competition and regulatory challenges. The below chart from Macquarie shows the strength of Behring compared to Seqirus. Margins expanded to 50%, up 90bps which was a positive. Shows the power of the collection centres. Good news on the Rika platform rollout and Albumin sales are recovering. The bad news is still in Vifor. Gross profits were down 3% and margins down 10bps. We had doubts about the acquisition. It seemed a high price, and with the loss of exclusivity of some of its drugs, it seemed a stretch. Expectations from brokers and the company are being wound back. The other issue, which also popped up last year, was the effect of the GLP-1 suite of drugs. It has nothing to do with weight loss, unlike ResMed (ASX: RMD), but more to do with the benefits of kidney disease, which is the space Vifor plays in. Management has talked about this in the press release. They talk about a transitioning iron market. Dampened near-term growth aspirations for Vifor.

---

Marcus Today contains stock market education, commentary and actionable ideas.

Sign up for a no-obligation 14-day free trial - click here.

Brokers are fairly positive on the results and the company’s outlook.

Most have downgraded target prices but not from results, rather because the CSL112 trial failure removes any future benefits from that area.

CSL is not expensive on a historical basis and we are comfortable to hold in the Long Term Growth Portfolio.

Expect some consolidation as short-term traders take profits after a great run, long-term investors have nothing to worry about. Is quality but needs some good news on Vifor before a meaningful uptick in share price again. HOLD. Founded in 1998, Marcus Today Stock Market Newsletter is a business that has built a community of like-minded investors who want to survive and thrive in the stock market. We achieve that through a combination of daily stock market education, ideas and activities.

Get access to more market commentary, sign up for a free trial now and become a better investor.