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Why Is Viatris (VTRS) Down 16.4% Since Last Earnings Report?
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A month has gone by since the last earnings report for Viatris (VTRS - Free Report) . Shares have lost about 16.4% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Viatris due for a breakout? 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 In-Line, Revenues Miss Estimates
Viatris reported adjusted earnings of 67 cents per share for the fourth quarter of 2022, down from 75 cents in the year-ago quarter.
Excluding the stock-based compensation expense, adjusted earnings came in at 69 cents per share, which was in line with the Zacks Consensus Estimate.
Total revenues came in at $3.9 billion, down 10.7% year over year. The top line missed the Zacks Consensus Estimate of $3.9 billion.
Quarter in Detail
Revenues include sales and other revenues. Sales of $3.8 billion were down 10.7% from the year-ago quarter on an operational basis.
The company reports results in four segments — Developed Markets, Emerging Markets, Japan, Australia and New Zealand (JANZ) and Greater China.
Developed market sales came in at $2.4 billion, down 7% from the year-ago quarter.
Sales from Emerging Markets came in at $580.6 million, down 20% year over year.
JANZ generated sales of $398.5 million, down 26%.
Sales from Greater China came in at $505.8 million, roughly flat with the year-ago quarter.
Revenues from Brands were down 11% year over year. Among these, Lipitor’s sales were $369.1 million, down from $390.4 million in the year-ago quarter. Norvasc sales were $175 million, down from $188.8 million in the year-ago quarter.
Complex generics performed in line with management expectations while, biosimilars were below expectations due to customer buying patterns.
Revenues from this business declined 26% year over year.
Generics, which include diversified product forms such as extended-release oral solids, injectables, transdermals and topicals, performed in line with management’s expectations, including solid performance across the broader portfolio in North America. Revenues from this business came in at $1.4 billion, down 5%.
Viatris generated $133 million in new product revenues (revenues from products launched in 2022), primarily driven by the launch of generic lenalidomide in the United States and achieved $483 million in total revenues for the year.
Adjusted gross margin came in at 56.9% compared with 56.6% in the year-ago quarter.
Other Updates
In November 2022, Viatris closed its transaction with Biocon Biologics Limited. Viatris had earlier announced an agreement with Biocon Biologics Limited whereby the former would sell its biosimilars portfolio to the latter. Total revenues relating to the biosimilars portfolio were approximately $611.5 million from Jan 1, 2022, to Nov 29, 2022.
Under the terms of the transaction agreement, Viatris received $3 billion in consideration in the form of a $2 billion cash payment and $1 billion of convertible preferred equity, representing a stake of at least 12.9% (on a fully diluted basis) in Biocon Biologics. Viatris also is entitled to $335 million of additional cash payments in 2024.
2022 Results
Revenues came in at $16.3 billion, down from $17.9 billion in 2021.
2023 Guidance
Revenues are projected between $15.5 billion and $16 billion.
How Have Estimates Been Moving Since Then?
It turns out, estimates review have trended downward during the past month.
The consensus estimate has shifted -10.39% due to these changes.
VGM Scores
At this time, Viatris has a poor Growth Score of F, 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. Notably, Viatris has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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Why Is Viatris (VTRS) Down 16.4% Since Last Earnings Report?
A month has gone by since the last earnings report for Viatris (VTRS - Free Report) . Shares have lost about 16.4% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Viatris due for a breakout? 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 In-Line, Revenues Miss Estimates
Viatris reported adjusted earnings of 67 cents per share for the fourth quarter of 2022, down from 75 cents in the year-ago quarter.
Excluding the stock-based compensation expense, adjusted earnings came in at 69 cents per share, which was in line with the Zacks Consensus Estimate.
Total revenues came in at $3.9 billion, down 10.7% year over year. The top line missed the Zacks Consensus Estimate of $3.9 billion.
Quarter in Detail
Revenues include sales and other revenues. Sales of $3.8 billion were down 10.7% from the year-ago quarter on an operational basis.
The company reports results in four segments — Developed Markets, Emerging Markets, Japan, Australia and New Zealand (JANZ) and Greater China.
Developed market sales came in at $2.4 billion, down 7% from the year-ago quarter.
Sales from Emerging Markets came in at $580.6 million, down 20% year over year.
JANZ generated sales of $398.5 million, down 26%.
Sales from Greater China came in at $505.8 million, roughly flat with the year-ago quarter.
Revenues from Brands were down 11% year over year. Among these, Lipitor’s sales were $369.1 million, down from $390.4 million in the year-ago quarter. Norvasc sales were $175 million, down from $188.8 million in the year-ago quarter.
Complex generics performed in line with management expectations while, biosimilars were below expectations due to customer buying patterns.
Revenues from this business declined 26% year over year.
Generics, which include diversified product forms such as extended-release oral solids, injectables, transdermals and topicals, performed in line with management’s expectations, including solid performance across the broader portfolio in North America. Revenues from this business came in at $1.4 billion, down 5%.
Viatris generated $133 million in new product revenues (revenues from products launched in 2022), primarily driven by the launch of generic lenalidomide in the United States and achieved $483 million in total revenues for the year.
Adjusted gross margin came in at 56.9% compared with 56.6% in the year-ago quarter.
Other Updates
In November 2022, Viatris closed its transaction with Biocon Biologics Limited. Viatris had earlier announced an agreement with Biocon Biologics Limited whereby the former would sell its biosimilars portfolio to the latter. Total revenues relating to the biosimilars portfolio were approximately $611.5 million from Jan 1, 2022, to Nov 29, 2022.
Under the terms of the transaction agreement, Viatris received $3 billion in consideration in the form of a $2 billion cash payment and $1 billion of convertible preferred equity, representing a stake of at least 12.9% (on a fully diluted basis) in Biocon Biologics. Viatris also is entitled to $335 million of additional cash payments in 2024.
2022 Results
Revenues came in at $16.3 billion, down from $17.9 billion in 2021.
2023 Guidance
Revenues are projected between $15.5 billion and $16 billion.
How Have Estimates Been Moving Since Then?
It turns out, estimates review have trended downward during the past month.
The consensus estimate has shifted -10.39% due to these changes.
VGM Scores
At this time, Viatris has a poor Growth Score of F, 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. Notably, Viatris has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.