Teva (TEVA) Up on Q1 Earnings & Sales Beat, Rise in Guidance
Israel-based Teva Pharmaceutical Industries Ltd. TEVA is a global pharmaceutical company with a strong presence in the generics as well as branded markets. The company’s branded products include Copaxone (multiple sclerosis), Azilect (Parkinson’s disease) and respiratory products like ProAir and Qvar. Moreover, the company has several candidates in its pipeline, which are in different stages of development mainly for the treatment of pain and asthma.
In early Aug 2016, Teva acquired Allergan’s generics business – Actavis Generics and in Oct 2016 it acquired the latter’s Anda Inc., the 4th largest distributor of generic pharmaceuticals in the U.S.
Teva is facing significant challenges in the form of accelerated generic competition for Copaxone, new competition for branded products, pricing erosion in the U.S. generics business, lower-than-expected contribution from new generic launches and a massive debt load.
Teva’s earnings surpassed expectations in only one of the last four quarters, met the same in one and missed expectations in the remaining two, resulting in an average positive surprise of 0.49%.
Currently, TEVA has a Zacks Rank #4 (Sell), but that could definitely change following the company’s earnings report which was just released. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
We have highlighted some of the key stats from this just-revealed announcement below:
Earnings Beat: Teva’s first-quarter earnings came in at 94 cents per share, which massively beat consensus estimate of 68 cents.
Revenues Beat: Teva posted revenues of $5.1 billion, which beat consensus estimates of $4.8 million. However, sales declined 10% year over year.
Key Statistics: As announced in November last year, Teva no longer reports two separate global groups for its two businesses – generics and specialty medicines. Instead, Teva now reports under new segments based on three regions —North America, Europe and Growth Markets.
North America segment sales were $2.5 billion, down 22% year over year due to pricing erosion in U.S. generics market, lower sales of its blockbuster multiple sclerosis drug, Copaxone due to generic competition and divesture of some non-core assets in the Women’s Health business.
Lead branded product, Copaxone, posted U.S. sales of $476 million, down 40% year over year due to generic competition for the 20 mg as well as the 40 mg formulation.
The Europe segment recorded revenues of $1.44 billion, up 8% year over year. However, in constant currency terms, sales declined 6%. In the Growth Markets, sales were flat in constant currency terms.
2018 Outlook Up: Teva raised its 2018 sales and earnings guidance. The revenue outlook was raised from a range of $18.3 – $18.8 billion to a range of $18.5 – $19.0 billion. Meanwhile, the earnings guidance was raised from a band of $2.25–$2.50 per share to $2.40-2.65 per share.
Share Price Impact: Shares were up more than 7% in pre-market trading on the guidance increase.
Check back later for our full write up on this TEVA earnings report later!
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