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Emergent (EBS) Beats Earnings & Revenue Estimates in Q3

ANIK CBM EBS

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Emergent BioSolutions, Inc. (EBS - Free Report) reported earnings of 58 cents per share in the third quarter of 2016, which surpassed the Zacks Consensus Estimate of 39 cents. However, the reported figure was down from 93 cents earned in the year-ago period.

Revenues in the reported quarter declined 9.8% from the year-ago period to $142.9 million, primarily due to lower BioThrax sales, which was a result of the Centers for Disease Control and Prevention’s (CDC) decision to not commit to procure all of the remaining doses under the 2011 contract. However, the CDC exercised its option to purchase all the remaining doses in late third-quarter 2016, which led to the shipment of a portion of the planned third-quarter deliveries in the fourth quarter.

However, revenues beat the Zacks Consensus Estimates of $88 million.

Quarter in Detail

Total product sales were down 18% to $96.7 million from the year-ago period, mainly due to lower BioThrax sales resulting from fewer doses delivered to the Strategic National Stockpile (SNS). Product sales from the BioThrax declined 14% to $94.1 million.

Contracts, grants and collaboration revenues were $31.5 million, up 7% from the year-ago quarter.

Contract manufacturing revenues came in at $14.7 million, up 30%. The increase was primarily driven by the timing of fill/finish services.

Research and development expenses were $27.2 million, down 20% from the year-ago quarter primarily due to lower contract service costs. Selling, general and administrative expenses were up 58% to $40.7 million. The increase was primarily a result of costs associated with the Aptevo spin-off and professional services to support the company’s strategic growth initiatives among other things, along with restructuring activities at the Lansing, MI site.

In Aug 2016, Emergent completed the spinoff of its Biosciences business into a separate publicly traded company, Aptevo Therapeutics Inc. .

In the third quarter, Emergent signed a five-year contract worth up to $1.6 billion with the Biomedical Advanced Research and Development Authority for the development of its next-generation anthrax vaccine candidate, NuThrax.

Moreover, the Department of Health and Human Services issued a Sole Source Notification, indicating its plan to award the company a follow-on procurement contract with the CDC for the purchase of 29.4 million doses of BioThrax for delivery into the SNS. Emergent anticipates finalizing the contract in the coming weeks. The company has postponed its financial guidance for 2016 until the procurement contract has been finalized.

EMERGENT BIOSOL Price, Consensus and EPS Surprise

 

EMERGENT BIOSOL Price, Consensus and EPS Surprise | EMERGENT BIOSOL Quote

Zacks Rank & Key Picks

Emergent currently carries a Zacks Rank #3 (Hold). A couple of better-ranked stocks in the health care sector include Anika Therapeutics Inc. (ANIK - Free Report) and Cambrex Corporation (CBM - Free Report) . Each of these stocks sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Anika’s earnings estimates have increased from $1.96 to $2.06 for 2016 and from $2.03 to $2.09 for 2017 over the last 60 days. The company has posted a positive earnings surprise in all of the four trailing quarters with an average beat of 33.14%. Its share price has increased 16% year to date.

Cambrex’s earnings estimates have increased from $2.46 to $2.60 for 2016 but have remained unchanged for 2017 over the last 60 days. The company has posted a positive earnings surprise in three of the four trailing quarters with an average beat of 19.78%.

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