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Teva (TEVA) Beats on Q2 Earnings, Misses Sales, Shares Dip

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Israel-based Teva Pharmaceutical Industries Ltd. (TEVA - Free Report) 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.

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. Nonetheless, Teva is progressing well on its strategic/restructuring initiatives to revive growth.

Teva’s earnings surpassed expectations in two of the last four quarters, and missed expectations in the remaining two, resulting in an average positive surprise of 10.1%.

Currently, TEVA has a Zacks Rank #2 (Buy), 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 second-quarter earnings came in at 78 cents per share which beat consensus estimate of 67 cents.

Revenues Miss: Teva posted revenues of $4.70 billion, which missed consensus estimates of $4.76 billion. Sales declined 18% (down 19% in constant currency terms) 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, it reports under new segments based on three regions — North America (United States and Canada), Europe and International Markets (previously named “Growth Markets” segment).

North America segment sales were $2.26 billion, down 29% year over year due to pricing erosion in U.S. generics market, lower sales of Copaxone and divestiture of some non-core assets in the Women’s Health business. In the United States, revenues declined 30% to $2.1 billion.

Lead branded product, Copaxone, posted sales of $464 million in North America, down 46% year over year due to generic competition for the 20 mg as well as the 40 mg formulation. In the United States, Copaxone recorded sales of $448 million.

The Europe segment recorded revenues of $1.33 billion, up 3% year over year. However, in constant currency terms, sales declined 5%. In the International Markets segments, sales declined 9% in constant currency terms.

2018 Outlook Up: Teva maintained its 2018 sales guidance while raising the earnings outlook. The revenue outlook was maintained in a range of $18.5 - $19.0 billion. Meanwhile, the earnings guidance was raised from a band of $2.40-2.65 per share to $2.55-2.80 per share.

Share Price Impact: Shares were down more than 8% in pre-market trading.

 

 

Check back later for our full write up on this TEVA earnings report later!

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