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Impax Laboratories Inc. (IPXL - Free Report) posted third-quarter 2016 earnings of 37 cents per share, missing the Zacks Consensus Estimate of 40 cents. Earnings were also down 7.5% from the year-ago period. The company’s share price fell 20.45% following its third-quarter earnings release.

Total revenue rose 3% to $227.9 million year over year, primarily driven by the performance of Specialty Pharma division. However, revenues were well below the Zacks Consensus Estimate of $235.1 million in the reported quarter.

Quarter in Detail

During the reported quarter, Generic division revenues declined 3% from the year-ago quarter to $175.3 million. Generic Division revenues bore the continued impact of competition on diclofenac and metaxalone, as well as lower revenue from sales of mixed amphetamine salts. However, the decreases were partially offset by an increase in sales and share position of epinephrine auto-injector and oxymorphone as well as increased volumes from acquired products than the prior-year period.

The Specialty Pharma division recorded revenues of $52.6 million, up 30% year over year, largely due to higher sales of Rytary and Zomig nasal spray.

Adjusted research and development (R&D) expenses grew 9% to $19.5 million in the reported quarter.

Adjusted selling, general and administrative expenses (SG&A) increased 11.6% to $47.4 million, primarily attributable to the sales force expansion and higher advertising and promotional activities to support the sales and marketing of Rytary.

2016 Outlook Lowered

Impax lowered its 2016 outlook to reflect management's current expectations with respect to prescription trends, pricing and inventory levels, and the anticipated timing of future product launches and events.

The company lowered its earnings expectations for 2016 to the range of $1.10−$1.20 per share (old guidance: $1.57−$1.70 per share).

Revenues expectations were lowered to the range of $840−$855 million (old guidance: $900−$940 million), primarily due to the effects of lower pricing and competition across a number of generic products.

Impax lowered its SG&A guidance for 2016 to the range of $185−$190 million (old guidance: $190−$200 million) due to cost saving initiatives being implemented across the company.

The company also lowered its estimate for R&D spend to the range of $90−$955 million (old guidance: $100−$105 million) primarily due to the timing of several development projects.

IMPAX LABORATRS Price, Consensus and EPS Surprise

 

IMPAX LABORATRS Price, Consensus and EPS Surprise | IMPAX LABORATRS Quote

Zacks Rank & Key Picks

Impax currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the health care sector include Anika Therapeutics Inc. (ANIK - Free Report) , Cambrex Corp. (CBM - Free Report) and Vanda Pharmaceuticals, Inc. (VNDA - Free Report) . Each of these stock sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Over the last 60 days, Anika’s earnings estimates have increased from $1.96 to $2.06 for 2016 and $2.03 to $2.09 for 2017. The company has posted a positive earnings surprise in all of the trailing four quarters with an average beat of 33.14%. Its share price has increased 14.2% year to date.

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

Vanda’s loss estimates narrowed from 68 cents to 60 cents for 2016 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 56.65%. Its share price has surged 75.6% year to date.

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