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Endo (ENDP) Beats on Q4 Earnings, Revenues; Guides Low
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Endo International plc’s fourth-quarter 2016 earnings of $1.77 per share beat the Zacks Consensus Estimate of $1.63. Reported earnings were also above the year-ago figure of $1.36.
Revenues came in at $1.24 billion in fourth-quarter of 2016, up 15.6% year over year. Revenues were also above the Zacks Consensus Estimate of $1.15 billion.
We note that shares of Endo have underperformed the Zacks classified Medical-Drugs industry in the last six months. Specifically, the stock lost 34.7% during this period in comparison to industry’s gain of 1%.
Quarterly Highlights
The company reports results through three segments – Branded Pharmaceuticals (U.S.), Generic Pharmaceuticals (U.S.) and International Pharmaceuticals.
U.S. Branded Pharmaceuticals sales were down 24% to $289 million, reflecting generic entry for Voltaren Gel in Mar 2016 and divestiture of Stendra. Voltaren Gel sales plunged 70% year over year to approximately $18.6 million. Sales of pain products Lidoderm and Opana ER were down 48% and 11%, respectively. However, Xiaflex sales increased 11% year over year reflecting double-digit demand growth for the product.
U.S. Generic Pharmaceuticals recorded sales of $882 million in the quarter, up 45% from the year-ago period due to the launches of the generic version of Seroquel XR and Zetia. Segment revenues also benefited from the robust performance of sterile injectables. However, generics base business revenues declined approximately 23% owing to continued pricing pressure and increased competition, particularly among Solid Oral Immediate Release (IR) products.
The International Pharmaceuticals division garnered sales of $70 million, down 18% year over year. Paladin revenues decreased 2% to $28 million due to intense competition. Revenues of Litha and Somar in the emerging markets declined 25% from the year-ago period to $38 million. The decrease was mainly due to the decline in Litha revenues which resulted from the divestiture of non-core assets.
2016 Results
Revenues in 2016 came in at $4.0 billion, down 23% from 2015 but beat the Zacks Consensus Estimate of $3.9 billion. Earnings per share came in $4.73, up from $4.66 in 2015 and beat the Zacks Consensus Estimate of $4.58.
2017 Outlook
Endo expects revenues in the range of $3.45 billion to $3.60 billion, lower than the 2016 revenues of $4.0 billion primarily due to the expected revenue decline in its Generics base business and legacy branded pain franchise, as well as the impact of divestitures and product discontinuations. The company expects earnings in the range of $3.45 to $3.75 per share. The Zacks Consensus Estimate for earnings is $4.24 per share on revenues of $3.87 billion.
Our Take
Although the Q4 results beat expectations, the outlook for 2017 was disappointing and lagged expectations. 2017 will continue to challenging for Endo as the generics base business and the legacy branded pain franchise are expected to decline further.
Sunesis’ loss estimates narrowed by 5.06% and 8.80% for 2016 and 2017, respectively, over the past 60 days. The company recorded a positive earnings surprise in three of the last four quarters, the average being 0.54%.
Celgene’s earnings estimates increased from $6.55 to $6.60 for 2017 and from $8.13 to $8.16 for 2018 over the last 30 days. The company posted a positive earnings surprise in three of the four trailing quarters with an average beat of 5.08%.
GlaxoSmithKline’s earnings estimates increased from $2.66 to $2.76 for 2017 and from $2.80 to $2.85 for 2018 over the last 30 days. The company posted a positive earnings surprise in three of the four trailing quarters with an average beat of 11.03%. Its share price increased 6.7% year to date.
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Endo (ENDP) Beats on Q4 Earnings, Revenues; Guides Low
Endo International plc’s fourth-quarter 2016 earnings of $1.77 per share beat the Zacks Consensus Estimate of $1.63. Reported earnings were also above the year-ago figure of $1.36.
Revenues came in at $1.24 billion in fourth-quarter of 2016, up 15.6% year over year. Revenues were also above the Zacks Consensus Estimate of $1.15 billion.
We note that shares of Endo have underperformed the Zacks classified Medical-Drugs industry in the last six months. Specifically, the stock lost 34.7% during this period in comparison to industry’s gain of 1%.
Quarterly Highlights
The company reports results through three segments – Branded Pharmaceuticals (U.S.), Generic Pharmaceuticals (U.S.) and International Pharmaceuticals.
U.S. Branded Pharmaceuticals sales were down 24% to $289 million, reflecting generic entry for Voltaren Gel in Mar 2016 and divestiture of Stendra. Voltaren Gel sales plunged 70% year over year to approximately $18.6 million. Sales of pain products Lidoderm and Opana ER were down 48% and 11%, respectively. However, Xiaflex sales increased 11% year over year reflecting double-digit demand growth for the product.
U.S. Generic Pharmaceuticals recorded sales of $882 million in the quarter, up 45% from the year-ago period due to the launches of the generic version of Seroquel XR and Zetia. Segment revenues also benefited from the robust performance of sterile injectables. However, generics base business revenues declined approximately 23% owing to continued pricing pressure and increased competition, particularly among Solid Oral Immediate Release (IR) products.
The International Pharmaceuticals division garnered sales of $70 million, down 18% year over year. Paladin revenues decreased 2% to $28 million due to intense competition. Revenues of Litha and Somar in the emerging markets declined 25% from the year-ago period to $38 million. The decrease was mainly due to the decline in Litha revenues which resulted from the divestiture of non-core assets.
2016 Results
Revenues in 2016 came in at $4.0 billion, down 23% from 2015 but beat the Zacks Consensus Estimate of $3.9 billion. Earnings per share came in $4.73, up from $4.66 in 2015 and beat the Zacks Consensus Estimate of $4.58.
2017 Outlook
Endo expects revenues in the range of $3.45 billion to $3.60 billion, lower than the 2016 revenues of $4.0 billion primarily due to the expected revenue decline in its Generics base business and legacy branded pain franchise, as well as the impact of divestitures and product discontinuations. The company expects earnings in the range of $3.45 to $3.75 per share. The Zacks Consensus Estimate for earnings is $4.24 per share on revenues of $3.87 billion.
Our Take
Although the Q4 results beat expectations, the outlook for 2017 was disappointing and lagged expectations. 2017 will continue to challenging for Endo as the generics base business and the legacy branded pain franchise are expected to decline further.
Zacks Rank & Stocks to Consider
Endo is a Zacks Rank #4 (Sell) stock. Some better-ranked stocks in the health care sector include Sunesis Pharmaceuticals , Celgene Corp. and GlaxoSmithKline plc (GSK - Free Report) . All the three stocks carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Sunesis’ loss estimates narrowed by 5.06% and 8.80% for 2016 and 2017, respectively, over the past 60 days. The company recorded a positive earnings surprise in three of the last four quarters, the average being 0.54%.
Celgene’s earnings estimates increased from $6.55 to $6.60 for 2017 and from $8.13 to $8.16 for 2018 over the last 30 days. The company posted a positive earnings surprise in three of the four trailing quarters with an average beat of 5.08%.
GlaxoSmithKline’s earnings estimates increased from $2.66 to $2.76 for 2017 and from $2.80 to $2.85 for 2018 over the last 30 days. The company posted a positive earnings surprise in three of the four trailing quarters with an average beat of 11.03%. Its share price increased 6.7% year to date.
A Full-Blown Technological Breakthrough in the Making
Zacks’ Aggressive Growth Strategist Brian Bolan explores autonomous cars in our latest Special Report, Driverless Cars: Your Roadmap to Mega-Profits Today. In addition to who will be selling them and how the auto industry will be impacted, Brian reveals 8 stocks with tremendous gain potential to feed off this phenomenon. Click to see the stocks right now >>