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Why Is Jazz Pharmaceuticals (JAZZ) Down 3.3% Since the Last Earnings Report?
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A month has gone by since the last earnings report for Jazz Pharmaceuticals PLC (JAZZ - Free Report) . Shares have lost about 3.3% 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 of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Jazz Pharmaceuticals Misses Q1 Earnings & Sales
Jazz Pharmaceuticals reported first-quarter 2017 earnings of $1.41 per share, which narrowly missed the Zacks Consensus Estimate of $1.42.
However, adjusted earnings of $1.90 per share – including stock based compensation expenses – increased 8% from the year-ago figure.
Total revenue in the reported quarter climbed 12% year over year to $376.1 million, mainly due to higher sales of Xyrem and Defitelio. Revenues, however, fell short of the Zacks Consensus Estimate of $378 million.
Quarter in Detail
Net product sales in the first quarter increased 11.9% from the year-ago quarter to 373.7 million.
In the reported quarter, Xyrem (sodium oxybate) sales rose 9% to $272.3 million. The company reported 1% bottle volume growth of Xyrem in the quarter.
Erwinaze/Erwinase generated revenues of $51.4 million, almost in line with the year-ago figure. However, the performance was negatively impacted in the quarter by raw material supply challenges. This led to fluctuations in inventory levels and temporary disruptions in the company's ability to supply certain markets, including the U.S. The company expects these supply interruptions to continue in 2017.
Prialt revenues came in at $7.7 million, up 24.2% from the year-ago period. Other product sales plunged 30.8% to $6.3 million.
The company’s Defitelio sales were up 101% to $35.9 million in the first quarter compared with the year-ago figure of $17.9 million. Defitelio was launched in the U.S. in Apr last year and so no U.S. sales were recorded in the first quarter of 2016. In the first quarter of 2017, the drug garnered sales of $11.6 million.
Adjusted selling, general and administrative (SG&A) expenses (excluding stock-based compensation expenses) during the quarter rose 15.6% to $118.5 million, primarily due to higher headcount and an increase in other expenses related to business expansion.
Adjusted research and development (R&D) expenses increased 45.7% to $40.8 million due to costs related to the development of its pipeline candidate JZP-258, increased expenses oxybate-related R&D programs, costs related to Vyxeos rolling NDA submission and an increase in head count required supporting these activities.
2017 Guidance
The company continues to expect earnings in the range of $10.70–$11.30 per share (excluding stock based compensation expenses) in 2017. Jazz also maintained its 2017 revenue guidance in the band of $1.62–$1.70 billion. Total product sales are still expected in the range of $1.62–$1.69 billion in 2017.
Xyrem sales are now expected in the range of $1.20–$1.23 billion (old guidance: $1.22–$1.25 billion). Erwinaze/Erwinase sales are anticipated in the range of $205–$225 million. Defitelio revenues are projected in the range of $130–$150 million.
The company projects adjusted SG&A expenses in the range of $440–$460 million, while R&D costs are expected in the range of $165–$180 million.
How Have Estimates Been Moving Since Then?
Analysts were quiet during the last one month period as none of them issued any earnings estimate revisions.
At this time, Jazz Pharmaceuticals' stock has an average Growth Score of 'C', though it is lagging a lot on the momentum front with an 'F'. The stock was allocated a grade of 'B' on the value side, putting it in the second 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.
Our style scores indicate that the stock is more suitable for value investors than growth investors.
Outlook
Notably, the stock has a Zacks Rank #3 (Hold). We expect in-line returns from the stock in the next few months.
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Why Is Jazz Pharmaceuticals (JAZZ) Down 3.3% Since the Last Earnings Report?
A month has gone by since the last earnings report for Jazz Pharmaceuticals PLC (JAZZ - Free Report) . Shares have lost about 3.3% 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 of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Jazz Pharmaceuticals Misses Q1 Earnings & Sales
Jazz Pharmaceuticals reported first-quarter 2017 earnings of $1.41 per share, which narrowly missed the Zacks Consensus Estimate of $1.42.
However, adjusted earnings of $1.90 per share – including stock based compensation expenses – increased 8% from the year-ago figure.
Total revenue in the reported quarter climbed 12% year over year to $376.1 million, mainly due to higher sales of Xyrem and Defitelio. Revenues, however, fell short of the Zacks Consensus Estimate of $378 million.
Quarter in Detail
Net product sales in the first quarter increased 11.9% from the year-ago quarter to 373.7 million.
In the reported quarter, Xyrem (sodium oxybate) sales rose 9% to $272.3 million. The company reported 1% bottle volume growth of Xyrem in the quarter.
Erwinaze/Erwinase generated revenues of $51.4 million, almost in line with the year-ago figure. However, the performance was negatively impacted in the quarter by raw material supply challenges. This led to fluctuations in inventory levels and temporary disruptions in the company's ability to supply certain markets, including the U.S. The company expects these supply interruptions to continue in 2017.
Prialt revenues came in at $7.7 million, up 24.2% from the year-ago period. Other product sales plunged 30.8% to $6.3 million.
The company’s Defitelio sales were up 101% to $35.9 million in the first quarter compared with the year-ago figure of $17.9 million. Defitelio was launched in the U.S. in Apr last year and so no U.S. sales were recorded in the first quarter of 2016. In the first quarter of 2017, the drug garnered sales of $11.6 million.
Adjusted selling, general and administrative (SG&A) expenses (excluding stock-based compensation expenses) during the quarter rose 15.6% to $118.5 million, primarily due to higher headcount and an increase in other expenses related to business expansion.
Adjusted research and development (R&D) expenses increased 45.7% to $40.8 million due to costs related to the development of its pipeline candidate JZP-258, increased expenses oxybate-related R&D programs, costs related to Vyxeos rolling NDA submission and an increase in head count required supporting these activities.
2017 Guidance
The company continues to expect earnings in the range of $10.70–$11.30 per share (excluding stock based compensation expenses) in 2017. Jazz also maintained its 2017 revenue guidance in the band of $1.62–$1.70 billion. Total product sales are still expected in the range of $1.62–$1.69 billion in 2017.
Xyrem sales are now expected in the range of $1.20–$1.23 billion (old guidance: $1.22–$1.25 billion). Erwinaze/Erwinase sales are anticipated in the range of $205–$225 million. Defitelio revenues are projected in the range of $130–$150 million.
The company projects adjusted SG&A expenses in the range of $440–$460 million, while R&D costs are expected in the range of $165–$180 million.
How Have Estimates Been Moving Since Then?
Analysts were quiet during the last one month period as none of them issued any earnings estimate revisions.
Jazz Pharmaceuticals PLC Price and Consensus
Jazz Pharmaceuticals PLC Price and Consensus | Jazz Pharmaceuticals PLC Quote
VGM Scores
At this time, Jazz Pharmaceuticals' stock has an average Growth Score of 'C', though it is lagging a lot on the momentum front with an 'F'. The stock was allocated a grade of 'B' on the value side, putting it in the second 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.
Our style scores indicate that the stock is more suitable for value investors than growth investors.
Outlook
Notably, the stock has a Zacks Rank #3 (Hold). We expect in-line returns from the stock in the next few months.