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Why Is United Therapeutics (UTHR) Down 5.6% Since the Last Earnings Report?
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It has been about a month since the last earnings report for United Therapeutics Corporation (UTHR - Free Report) . Shares have lost about 5.6% in that time frame, underperforming the market.
Will the recent negative trend continue leading up to the stock's next earnings release, or is it due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
United Therapeutics Misses Q4 Earnings & Sales
United Therapeutics’ fourth-quarter results were disappointing, with both earnings and sales missing estimates. Shares declined in response to the weak quarterly results and probably management’s commentary about increased competitive pressure from oral therapies.
United Therapeutics reported adjusted earnings of $2.64 per share (including after-tax impact of stock-based compensation expense) for fourth-quarter 2016, which missed the Zacks Consensus Estimate of $3.62 by 27.1%. Adjusted earnings, excluding stock-based compensation expense, were $4.12 per share, up 8.4% year over year.
Revenues for the reported quarter increased 1% year over year to $409 million but fell short of the Zacks Consensus Estimate of $424 million.
The Quarter in Detail
United Therapeutics markets four products for the treatment of pulmonary arterial hypertension (PAH) – Remodulin, Tyvaso, Adcirca and Orenitram.
Orenitram reported sales of $38.3 million in the quarter, up 3% year over year. Adcirca reported sales of $112.7 million, up 23.2% year over year. Tyvaso sales totaled $93.6 million, down 21.5% year over year. Remodulin sales were $151.2 million, up 7.6% year over year. However, Remodulin sales slightly declined sequentially. Unituxin (for the treatment of pediatric patients with high-risk neuroblastoma) reported sales of $13.2 million, down 16.5% year over year.
At the call, the company said that growth of its PAH drugs Orenitram, Tyvaso and Remodulin were slower than expected. The company said that patients were staying longer on oral PAH therapies like Adcirca and Letairis and Actelion’s new drug Uptravi (selexipag).
At the call, the company said that more and more patients were taking Uptravi, a combination of Adcirca and Letairis, as the AMBITION study showed that the combination of Adcirca plus Letairis reduced morbidity and mortality from pulmonary hypertension.
Though Orenitram sales growth was slow in 2016, management estimates the drug has $1 billion peak revenue potential. Favorable results from the Freedom-EV study, label expansion and patients’ transitioning to Orenitram from Uptravi therapy can push up sales.
Research and development (R&D) expenses (including stock-based compensation expense) in the fourth quarter declined 11.9% from the year-ago quarter to $66.9 million. Selling, general and administrative (SG&A) expenses (including stock-based compensation expense) also declined 6.2% from the year-ago quarter to $139.5 million as higher grants were offset by lower share-based compensation expenses.
2016 Results
Full-year sales improved 9% to $1.6 billion, missing the Zacks Consensus Estimate of $1.616 billion.
Adjusted earnings, excluding stock-based compensation expense, were $16.00 per share, up 29.8% year over year.
In 2016, United Therapeutics bought back shares worth $500 million.
How Have Estimates Been Moving Since Then?
Following the release , investors have witnessed an upward trend in fresh estimates. There have been two revisions higher for the current quarter In the past month, the consensus estimate has shifted by 9.5% due to these changes.
United Therapeutics Corporation Price and Consensus
At this time, United Therapeutics' stock has a subpar Growth Score of 'D', though it is lagging a bit on the momentum front with an 'F'. 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.
The company's stock is suitable solely for value based on our styles scores.
Outlook
Estimates have been trending upward for the stock. The magnitude of these revisions also looks promising. Notably, the stock has a Zacks Rank #3 (Hold). We are expecting an inline return from the stock in the next few months.
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Why Is United Therapeutics (UTHR) Down 5.6% Since the Last Earnings Report?
It has been about a month since the last earnings report for United Therapeutics Corporation (UTHR - Free Report) . Shares have lost about 5.6% in that time frame, underperforming the market.
Will the recent negative trend continue leading up to the stock's next earnings release, or is it due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
United Therapeutics Misses Q4 Earnings & Sales
United Therapeutics’ fourth-quarter results were disappointing, with both earnings and sales missing estimates. Shares declined in response to the weak quarterly results and probably management’s commentary about increased competitive pressure from oral therapies.
United Therapeutics reported adjusted earnings of $2.64 per share (including after-tax impact of stock-based compensation expense) for fourth-quarter 2016, which missed the Zacks Consensus Estimate of $3.62 by 27.1%. Adjusted earnings, excluding stock-based compensation expense, were $4.12 per share, up 8.4% year over year.
Revenues for the reported quarter increased 1% year over year to $409 million but fell short of the Zacks Consensus Estimate of $424 million.
The Quarter in Detail
United Therapeutics markets four products for the treatment of pulmonary arterial hypertension (PAH) – Remodulin, Tyvaso, Adcirca and Orenitram.
Orenitram reported sales of $38.3 million in the quarter, up 3% year over year. Adcirca reported sales of $112.7 million, up 23.2% year over year. Tyvaso sales totaled $93.6 million, down 21.5% year over year. Remodulin sales were $151.2 million, up 7.6% year over year. However, Remodulin sales slightly declined sequentially. Unituxin (for the treatment of pediatric patients with high-risk neuroblastoma) reported sales of $13.2 million, down 16.5% year over year.
At the call, the company said that growth of its PAH drugs Orenitram, Tyvaso and Remodulin were slower than expected. The company said that patients were staying longer on oral PAH therapies like Adcirca and Letairis and Actelion’s new drug Uptravi (selexipag).
At the call, the company said that more and more patients were taking Uptravi, a combination of Adcirca and Letairis, as the AMBITION study showed that the combination of Adcirca plus Letairis reduced morbidity and mortality from pulmonary hypertension.
Though Orenitram sales growth was slow in 2016, management estimates the drug has $1 billion peak revenue potential. Favorable results from the Freedom-EV study, label expansion and patients’ transitioning to Orenitram from Uptravi therapy can push up sales.
Research and development (R&D) expenses (including stock-based compensation expense) in the fourth quarter declined 11.9% from the year-ago quarter to $66.9 million. Selling, general and administrative (SG&A) expenses (including stock-based compensation expense) also declined 6.2% from the year-ago quarter to $139.5 million as higher grants were offset by lower share-based compensation expenses.
2016 Results
Full-year sales improved 9% to $1.6 billion, missing the Zacks Consensus Estimate of $1.616 billion.
Adjusted earnings, excluding stock-based compensation expense, were $16.00 per share, up 29.8% year over year.
In 2016, United Therapeutics bought back shares worth $500 million.
How Have Estimates Been Moving Since Then?
Following the release , investors have witnessed an upward trend in fresh estimates. There have been two revisions higher for the current quarter In the past month, the consensus estimate has shifted by 9.5% due to these changes.
United Therapeutics Corporation Price and Consensus
United Therapeutics Corporation Price and Consensus | United Therapeutics Corporation Quote
VGM Scores
At this time, United Therapeutics' stock has a subpar Growth Score of 'D', though it is lagging a bit on the momentum front with an 'F'. 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.
The company's stock is suitable solely for value based on our styles scores.
Outlook
Estimates have been trending upward for the stock. The magnitude of these revisions also looks promising. Notably, the stock has a Zacks Rank #3 (Hold). We are expecting an inline return from the stock in the next few months.