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Why Is Viatris (VTRS) Down 2.4% Since Last Earnings Report?
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It has been about a month since the last earnings report for Viatris (VTRS - Free Report) . Shares have lost about 2.4% 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 catalysts.
Viatris Q1 Earnings Beat, Revenues Miss Estimates
Viatris reported adjusted earnings of 78 cents per share for the first quarter of 2023, down from 93 cents in the year-ago quarter but beating the Zacks Consensus Estimate of 69 cents per share.
Total revenues came in at $3.7 billion, down 11% year over year. The top line missed the Zacks Consensus Estimate of $3.8 billion.
Quarter in Detail
Revenues include sales and other revenues. Sales of $3.7 billion were down 11% from the year-ago quarter (6% 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 $2.2 billion, down 4% (adjusted for the impact of the biosimilars divestiture in November 2022) from the year-ago quarter.
In November 2022, Viatris closed its transaction with Biocon Biologics Limited. Viatris had earlier announced an agreement with Biocon Biologics Limited whereby Viatris would sell its biosimilars portfolio to the latter.
Sales from Emerging Markets came in at $641.9 million, up 1% year over year.
JANZ generated sales of $342.2 million, down 10%.
Sales from Greater China came in at $564.6 million, up 5% year over year.
Revenues from Brands were down 5% year over year to $2.4 billion. Among these, Lipitor’s sales were $417.9 million, down from $440.1 million in the year-ago quarter. Norvasc sales were $202.7 million, down from $207.8 million in the year-ago quarter.
Complex generics performed lower than management expectations, primarily due to the phasing of certain products. Revenues from this business declined 65% year over year.
Generics, which include diversified product forms such as extended-release oral solids, injectables, transdermals and topicals, performed ahead of management’s expectations, including solid performance across the broader portfolio in developed and emerging markets. Revenues from this business came in at $1.2 billion, down 6%.
Viatris generated $85 million in new product revenues, primarily driven by the introduction of generic lenalidomide in the United States. It targets to achieve approximately $500 million in new revenues in 2023.
Adjusted gross margin came in at 60.4%, up from 59.5% in the year-ago quarter.
2023 Guidance Reiterated
Revenues are projected between $15.5 billion and $16 billion.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision have trended downward during the past month.
VGM Scores
Currently, Viatris has a nice Growth Score of B, a grade with the same score on the momentum front. Charting a somewhat similar path, 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 A. 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 has been net zero. Notably, Viatris has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
Viatris is part of the Zacks Medical Services industry. Over the past month, Teladoc (TDOC - Free Report) , a stock from the same industry, has gained 1.2%. The company reported its results for the quarter ended March 2023 more than a month ago.
Teladoc reported revenues of $629.24 million in the last reported quarter, representing a year-over-year change of +11.3%. EPS of -$0.37 for the same period compares with -$0.47 a year ago.
For the current quarter, Teladoc is expected to post a loss of $0.44 per share, indicating no change from the year-ago quarter. The Zacks Consensus Estimate has changed -0.2% over the last 30 days.
Teladoc has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of B.
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Why Is Viatris (VTRS) Down 2.4% Since Last Earnings Report?
It has been about a month since the last earnings report for Viatris (VTRS - Free Report) . Shares have lost about 2.4% 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 catalysts.
Viatris Q1 Earnings Beat, Revenues Miss Estimates
Viatris reported adjusted earnings of 78 cents per share for the first quarter of 2023, down from 93 cents in the year-ago quarter but beating the Zacks Consensus Estimate of 69 cents per share.
Total revenues came in at $3.7 billion, down 11% year over year. The top line missed the Zacks Consensus Estimate of $3.8 billion.
Quarter in Detail
Revenues include sales and other revenues. Sales of $3.7 billion were down 11% from the year-ago quarter (6% 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 $2.2 billion, down 4% (adjusted for the impact of the biosimilars divestiture in November 2022) from the year-ago quarter.
In November 2022, Viatris closed its transaction with Biocon Biologics Limited. Viatris had earlier announced an agreement with Biocon Biologics Limited whereby Viatris would sell its biosimilars portfolio to the latter.
Sales from Emerging Markets came in at $641.9 million, up 1% year over year.
JANZ generated sales of $342.2 million, down 10%.
Sales from Greater China came in at $564.6 million, up 5% year over year.
Revenues from Brands were down 5% year over year to $2.4 billion. Among these, Lipitor’s sales were $417.9 million, down from $440.1 million in the year-ago quarter. Norvasc sales were $202.7 million, down from $207.8 million in the year-ago quarter.
Complex generics performed lower than management expectations, primarily due to the phasing of certain products. Revenues from this business declined 65% year over year.
Generics, which include diversified product forms such as extended-release oral solids, injectables, transdermals and topicals, performed ahead of management’s expectations, including solid performance across the broader portfolio in developed and emerging markets. Revenues from this business came in at $1.2 billion, down 6%.
Viatris generated $85 million in new product revenues, primarily driven by the introduction of generic lenalidomide in the United States. It targets to achieve approximately $500 million in new revenues in 2023.
Adjusted gross margin came in at 60.4%, up from 59.5% in the year-ago quarter.
2023 Guidance Reiterated
Revenues are projected between $15.5 billion and $16 billion.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision have trended downward during the past month.
VGM Scores
Currently, Viatris has a nice Growth Score of B, a grade with the same score on the momentum front. Charting a somewhat similar path, 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 A. 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 has been net zero. Notably, Viatris has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
Viatris is part of the Zacks Medical Services industry. Over the past month, Teladoc (TDOC - Free Report) , a stock from the same industry, has gained 1.2%. The company reported its results for the quarter ended March 2023 more than a month ago.
Teladoc reported revenues of $629.24 million in the last reported quarter, representing a year-over-year change of +11.3%. EPS of -$0.37 for the same period compares with -$0.47 a year ago.
For the current quarter, Teladoc is expected to post a loss of $0.44 per share, indicating no change from the year-ago quarter. The Zacks Consensus Estimate has changed -0.2% over the last 30 days.
Teladoc has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of B.