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Viatris (VTRS) Up 10.2% Since Last Earnings Report: Can It Continue?
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It has been about a month since the last earnings report for Viatris (VTRS - Free Report) . Shares have added about 10.2% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Viatris due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Viatris reported adjusted earnings of 80 cents per share in the fourth quarter of 2021, missing the Zacks Consensus Estimate of 82 cents. In the year-ago quarter, the company reported earnings of 94 cents.
The company was formed in November 2020 through the combination of Mylan and Upjohn. Total revenues came in at $4.34 billion, up 19.8% year over year.
The top line beat the Zacks Consensus Estimate by 0.71%.
Quarter in Detail
Revenues include sales and other revenues. Sales of $4.33 billion jumped 21% from the year-ago quarter. Sales were down 2% compared with combined adjusted results in the year-ago quarter.
The company reports results in four segments — Developed Markets, Emerging Markets, JANZ (Japan, Australia and New Zealand) and Greater China.
Developed market sales came in at $2.6 billion, up 8% from the year-ago quarter.
Sales from Emerging Markets came in at $727.5 million, up 16% year over year.
JANZ generated sales of $539.2 million, surging 38%.
Sales from Greater China came in at $503.8 million compared with $190.6 million a year ago.
On the basis of product category, Brands performed better than expectations, driven by products such as Lipitor, Lyrica and the Thrombosis portfolio and generated revenues of $2.6 billion. Complex generics and biosimilars were impacted by competition for Wixela Inhub and Xulane and raked in sales of $348.4 million. Generics, which include diversified product forms such as extended-release oral solids, injectables, transdermals and topicals, performed better than expected, driven primarily by strength in the JANZ and Emerging Markets segments.
Viatris generated $117 million in new product revenues (revenues from products launched in 2021).
Adjusted gross margin increased to 56.6% from 52.5% in the year-ago quarter.
2021 Results
Total revenues came in at $17.9 billion, up from $11.9 billion in 2020. The company generated approximately $700 million in new product revenues and achieved about $500 million in synergies in 2021.
Other Updates
Viatris also announced a definitive agreement with Biocon Biologics Limited whereby it will contribute its biosimilars portfolio to the latter.
Under the terms of the agreement, Viatris will combine its biosimilars portfolio with Biocon Biologics Ltd in exchange for pre-tax consideration of up to $3.335 billion.
Viatris will receive $3 billion in consideration in the form of a $2 billion cash payment and $1 billion of convertible preferred equity at the time of close, which is currently expected to occur in the second half of 2022, subject to the satisfaction of closing conditions, including certain regulatory approvals. Viatris will own a stake of at least 12.9% of Biocon Biologics, on a fully diluted basis. Viatris has agreed to pay $264 million to resolve the EpiPen Auto-Injector indirect purchaser class action cases pending in the U.S. District Court for the District of Kansas.
Guidance Update
Revenues are projected between $17 billion and $17.5 billion. The Zacks Consensus Estimate is pegged at $17.48 billion.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in fresh estimates.
The consensus estimate has shifted -5.9% due to these changes.
VGM Scores
Currently, Viatris has a subpar Growth Score of D, a grade with the same score on the momentum front. However, the stock was allocated a grade of A on the value side, putting it in the top quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. It's no surprise Viatris has a Zacks Rank #5 (Strong Sell). We expect a below average return from the stock in the next few months.
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Viatris (VTRS) Up 10.2% Since Last Earnings Report: Can It Continue?
It has been about a month since the last earnings report for Viatris (VTRS - Free Report) . Shares have added about 10.2% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Viatris due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Viatris' Q4 Earnings Miss, Biocon Biologics Deal Inked
Viatris reported adjusted earnings of 80 cents per share in the fourth quarter of 2021, missing the Zacks Consensus Estimate of 82 cents. In the year-ago quarter, the company reported earnings of 94 cents.
The company was formed in November 2020 through the combination of Mylan and Upjohn. Total revenues came in at $4.34 billion, up 19.8% year over year.
The top line beat the Zacks Consensus Estimate by 0.71%.
Quarter in Detail
Revenues include sales and other revenues. Sales of $4.33 billion jumped 21% from the year-ago quarter. Sales were down 2% compared with combined adjusted results in the year-ago quarter.
The company reports results in four segments — Developed Markets, Emerging Markets, JANZ (Japan, Australia and New Zealand) and Greater China.
Developed market sales came in at $2.6 billion, up 8% from the year-ago quarter.
Sales from Emerging Markets came in at $727.5 million, up 16% year over year.
JANZ generated sales of $539.2 million, surging 38%.
Sales from Greater China came in at $503.8 million compared with $190.6 million a year ago.
On the basis of product category, Brands performed better than expectations, driven by products such as Lipitor, Lyrica and the Thrombosis portfolio and generated revenues of $2.6 billion. Complex generics and biosimilars were impacted by competition for Wixela Inhub and Xulane and raked in sales of $348.4 million. Generics, which include diversified product forms such as extended-release oral solids, injectables, transdermals and topicals, performed better than expected, driven primarily by strength in the JANZ and Emerging Markets segments.
Viatris generated $117 million in new product revenues (revenues from products launched in 2021).
Adjusted gross margin increased to 56.6% from 52.5% in the year-ago quarter.
2021 Results
Total revenues came in at $17.9 billion, up from $11.9 billion in 2020. The company generated approximately $700 million in new product revenues and achieved about $500 million in synergies in 2021.
Other Updates
Viatris also announced a definitive agreement with Biocon Biologics Limited whereby it will contribute its biosimilars portfolio to the latter.
Under the terms of the agreement, Viatris will combine its biosimilars portfolio with Biocon Biologics Ltd in exchange for pre-tax consideration of up to $3.335 billion.
Viatris will receive $3 billion in consideration in the form of a $2 billion cash payment and $1 billion of convertible preferred equity at the time of close, which is currently expected to occur in the second half of 2022, subject to the satisfaction of closing conditions, including certain regulatory approvals. Viatris will own a stake of at least 12.9% of Biocon Biologics, on a fully diluted basis.
Viatris has agreed to pay $264 million to resolve the EpiPen Auto-Injector indirect purchaser class action cases pending in the U.S. District Court for the District of Kansas.
Guidance Update
Revenues are projected between $17 billion and $17.5 billion. The Zacks Consensus Estimate is pegged at $17.48 billion.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in fresh estimates.
The consensus estimate has shifted -5.9% due to these changes.
VGM Scores
Currently, Viatris has a subpar Growth Score of D, a grade with the same score on the momentum front. However, the stock was allocated a grade of A on the value side, putting it in the top quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. It's no surprise Viatris has a Zacks Rank #5 (Strong Sell). We expect a below average return from the stock in the next few months.