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WST Stock Rises on Q2 Earnings Beat, EPS View Up on Tariff & FX Benefit
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Key Takeaways
WST Q2 EPS rose 21.5% to $1.84, beating estimates by 21.9% on 9.2% revenue growth.
Proprietary Products led with 11.3% HVP growth; GLP-1 elastomers made up 8% of total sales.
WST raised FY25 EPS to $6.65-$6.85, citing FX tailwinds and $15-$20M tariff-related net benefit.
West Pharmaceutical Services, Inc. (WST - Free Report) delivered adjusted second-quarter 2025 earnings per share (EPS) of $1.84, which moved up 21.5% year over year. The figure topped the Zacks Consensus Estimate by 21.9%.
The adjustments include expenses related to the amortization of acquisition-related intangible assets, among others.
GAAP EPS for the quarter was $1.82, reflecting an improvement of 20.5% from the year-ago figure.
WST’s Revenues in Detail
Quarterly revenues of $766.5 million were up 9.2% year over year and surpassed the Zacks Consensus Estimate by 5.4%.
Organic net sales, which exclude the impact of acquisitions and/or divestitures, were up 6.8% year over year.
Robustperformances by the Proprietary Products and Contract-Manufactured Products segments drove thetop-line improvement.
Shares of WST were up nearly 15.5% in today’s pre-market trading. The company’s shares have lost 30.6% so far this year against the industry’s growth of 0.6%. The S&P 500 Index has increased 7.7% in the said period.
Image Source: Zacks Investment Research
West Pharmaceutical’s Segment Details
WST operates under two segments — Proprietary Products and Contract-Manufactured Products.
In the quarter under review, Proprietary Products reported worldwide revenues of $619.8 million, up 10.7% year over year on a reported basis. Our estimate for the segment’s second-quarter revenues was pinned at $583.5 million.
On an organic basis, revenues totaled $606.9 million, up 8.4% year over year.
Thesegment’s high-value product (“HVP”) accounted for 47% of its net sales during the period.Sales of HVP components were up 11.3%, driven by strength in Westar and NovaChoice products. HVP Delivery Devices represented 13% of total company net sales and increased 30%, driven mainly by Daikyo Crystal Zenith and Administration Systems. Standard Products, 21% of total company net sales, increased 0.4%.
Each of WST’s Biologics, Pharma and Generics market units reported high-single digit organic net sales growth.
Revenues in the Contract-Manufactured Products segment totaled $146.7 million, up 3% year over year on a reported basis. This growth was driven by an increase in sales of self-injection devices for obesity and diabetes, partially offset by a decrease in sales of healthcare diagnostic devices. Our estimate for this segment’s second-quarter revenues was pegged at $138.7 million.
Organic revenues amounted to $143.1 million, up 0.5% year over year.
WST’s Margin Analysis
In the quarter under review, West Pharmaceutical’s gross profit increased 19.1% year over year to $273.9 million. The gross margin expanded 290 basis points (bps) to 35.7%. We had projected 33.6% of gross margin for the second quarter of 2025.
Selling, general and administrative expenses increased 15.5% year over year to $95.9 million. Research and development expenses increased 9.1% to $19.1 million.
Adjusted operating profit totaled $155.3 million, reflecting a 22.9% improvement from the year-ago quarter’s level. The adjusted operating margin expanded 230 bps to 20.3%. We had projected 20.7% of operating margin for the second quarter of 2025.
West Pharmaceutical’s Financial Position
WST exited the second quarter with cash and cash equivalents of $509.7 million compared with $404.2 million as of March-end. Total debt at the end of the reported quarter was $202.6 million, which remained flat sequentially.
Cumulative net cash provided by continuing operating activities at the end of the second quarter was $306.5 million compared with $283.2 million a year ago.
West Pharmaceutical has a consistent dividend-paying history, with a five-year annualized dividend growth rate of 5.55%.
WST’s Guidance
West Pharmaceutical has updated its financial outlook for 2025.
WST now projects full-year revenues to be between $3.04 billion and $3.06 billion (up from its previous guidance of $2.945-$2.975 billion). The Zacks Consensus Estimate is pegged at $2.97 billion.
For 2025, organic net sales are expected to grow 3-3.75% from the prior-year level.
For the full year, adjusted EPS is now anticipated to be in the range of $6.65-$6.85 (up from the previous guidance of $6.15-$6.35). Full-year EPS guidance now reflects a 27 cents tailwind from currency movement against previous guidance of no impact. The updated adjusted-diluted EPS guidance also incorporates an estimate of $15-$20 million for the net impact of recently implemented tariffs for the remainder of 2025. The Zacks Consensus Estimate is pegged at $6.29.
West Pharmaceutical Services, Inc. Price, Consensus and EPS Surprise
West Pharmaceutical exited the second quarter of 2025 with better-than-expected results. Solid top-line results, along with improvements in organic revenues, were impressive. Robust performance by the Proprietary Products segment was encouraging. Strength in HVP and robust growth in the Biologics and Pharma market units during the reported quarter were also promising. Second-quarter sales benefited from rising GLPI-1 demand as GLP-1 elastomer products accounted for 8% of total company revenues.
The rising demand for auto-injectors and pens serving the obesity and diabetes market drove contract-manufacturing product sales during the quarter. This was partially offset by lifecycle management of a CGM diagnostic device. WST expects segment’s organic revenues to increase low-single-digits for full-year 2025.
WST added 370 Annex-1 / HVP Upgrade projects during the second quarter, up from 340 in the first quarter. The higher number of HVP projects should continue to accelerate top-line growth going forward.
West Pharmaceutical’s Zacks Rank and Other Key Picks
WST currently carries a Zacks Rank #2 (Buy).
Some other top-ranked stocks from the broader medical space that are expected to report earnings soon are Align Technology (ALGN - Free Report) , Cardinal Health, Inc. (CAH - Free Report) and Cencora, Inc. (COR - Free Report) .
The Zacks Consensus Estimate for Align Technology’s second-quarter 2025 adjusted EPS is currently pegged at $2.57. The consensus estimate for revenues is pegged at $1.06 billion. ALGN currently carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Align Technology has an estimated long-term growth rate of 11.2%. However, ALGN’s earnings yield of 5.1% compares unfavorably with the industry’s 5.4%.
Cardinal Health currently has a Zacks Rank #2. The Zacks Consensus Estimate for fourth-quarter fiscal 2025 adjusted EPS is currently pegged at $2.03 and the same for revenues is pinned at $60.67 billion.
Cardinal Health has an estimated long-term growth rate of 10.9%. CAH’s earnings yield of 5.7% compares favorably with the industry’s 5.5%.
Cencora currently carries a Zacks Rank #2. The Zacks Consensus Estimate for third-quarter fiscal 2025 adjusted EPS is currently pegged at $3.78 and the same for revenues is pinned at $80.33 billion.
Cencora has an estimated long-term growth rate of 12.8%. COR’s earnings yield of 5.4% compares favorably with the industry’s 4.1%.
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WST Stock Rises on Q2 Earnings Beat, EPS View Up on Tariff & FX Benefit
Key Takeaways
West Pharmaceutical Services, Inc. (WST - Free Report) delivered adjusted second-quarter 2025 earnings per share (EPS) of $1.84, which moved up 21.5% year over year. The figure topped the Zacks Consensus Estimate by 21.9%.
The adjustments include expenses related to the amortization of acquisition-related intangible assets, among others.
GAAP EPS for the quarter was $1.82, reflecting an improvement of 20.5% from the year-ago figure.
WST’s Revenues in Detail
Quarterly revenues of $766.5 million were up 9.2% year over year and surpassed the Zacks Consensus Estimate by 5.4%.
Organic net sales, which exclude the impact of acquisitions and/or divestitures, were up 6.8% year over year.
Robustperformances by the Proprietary Products and Contract-Manufactured Products segments drove thetop-line improvement.
Shares of WST were up nearly 15.5% in today’s pre-market trading. The company’s shares have lost 30.6% so far this year against the industry’s growth of 0.6%. The S&P 500 Index has increased 7.7% in the said period.
Image Source: Zacks Investment Research
West Pharmaceutical’s Segment Details
WST operates under two segments — Proprietary Products and Contract-Manufactured Products.
In the quarter under review, Proprietary Products reported worldwide revenues of $619.8 million, up 10.7% year over year on a reported basis. Our estimate for the segment’s second-quarter revenues was pinned at $583.5 million.
On an organic basis, revenues totaled $606.9 million, up 8.4% year over year.
Thesegment’s high-value product (“HVP”) accounted for 47% of its net sales during the period.Sales of HVP components were up 11.3%, driven by strength in Westar and NovaChoice products. HVP Delivery Devices represented 13% of total company net sales and increased 30%, driven mainly by Daikyo Crystal Zenith and Administration Systems. Standard Products, 21% of total company net sales, increased 0.4%.
Each of WST’s Biologics, Pharma and Generics market units reported high-single digit organic net sales growth.
Revenues in the Contract-Manufactured Products segment totaled $146.7 million, up 3% year over year on a reported basis. This growth was driven by an increase in sales of self-injection devices for obesity and diabetes, partially offset by a decrease in sales of healthcare diagnostic devices. Our estimate for this segment’s second-quarter revenues was pegged at $138.7 million.
Organic revenues amounted to $143.1 million, up 0.5% year over year.
WST’s Margin Analysis
In the quarter under review, West Pharmaceutical’s gross profit increased 19.1% year over year to $273.9 million. The gross margin expanded 290 basis points (bps) to 35.7%. We had projected 33.6% of gross margin for the second quarter of 2025.
Selling, general and administrative expenses increased 15.5% year over year to $95.9 million. Research and development expenses increased 9.1% to $19.1 million.
Adjusted operating profit totaled $155.3 million, reflecting a 22.9% improvement from the year-ago quarter’s level. The adjusted operating margin expanded 230 bps to 20.3%. We had projected 20.7% of operating margin for the second quarter of 2025.
West Pharmaceutical’s Financial Position
WST exited the second quarter with cash and cash equivalents of $509.7 million compared with $404.2 million as of March-end. Total debt at the end of the reported quarter was $202.6 million, which remained flat sequentially.
Cumulative net cash provided by continuing operating activities at the end of the second quarter was $306.5 million compared with $283.2 million a year ago.
West Pharmaceutical has a consistent dividend-paying history, with a five-year annualized dividend growth rate of 5.55%.
WST’s Guidance
West Pharmaceutical has updated its financial outlook for 2025.
WST now projects full-year revenues to be between $3.04 billion and $3.06 billion (up from its previous guidance of $2.945-$2.975 billion). The Zacks Consensus Estimate is pegged at $2.97 billion.
For 2025, organic net sales are expected to grow 3-3.75% from the prior-year level.
For the full year, adjusted EPS is now anticipated to be in the range of $6.65-$6.85 (up from the previous guidance of $6.15-$6.35). Full-year EPS guidance now reflects a 27 cents tailwind from currency movement against previous guidance of no impact. The updated adjusted-diluted EPS guidance also incorporates an estimate of $15-$20 million for the net impact of recently implemented tariffs for the remainder of 2025. The Zacks Consensus Estimate is pegged at $6.29.
West Pharmaceutical Services, Inc. Price, Consensus and EPS Surprise
West Pharmaceutical Services, Inc. price-consensus-eps-surprise-chart | West Pharmaceutical Services, Inc. Quote
Our Take
West Pharmaceutical exited the second quarter of 2025 with better-than-expected results. Solid top-line results, along with improvements in organic revenues, were impressive. Robust performance by the Proprietary Products segment was encouraging. Strength in HVP and robust growth in the Biologics and Pharma market units during the reported quarter were also promising. Second-quarter sales benefited from rising GLPI-1 demand as GLP-1 elastomer products accounted for 8% of total company revenues.
The rising demand for auto-injectors and pens serving the obesity and diabetes market drove contract-manufacturing product sales during the quarter. This was partially offset by lifecycle management of a CGM diagnostic device. WST expects segment’s organic revenues to increase low-single-digits for full-year 2025.
WST added 370 Annex-1 / HVP Upgrade projects during the second quarter, up from 340 in the first quarter. The higher number of HVP projects should continue to accelerate top-line growth going forward.
West Pharmaceutical’s Zacks Rank and Other Key Picks
WST currently carries a Zacks Rank #2 (Buy).
Some other top-ranked stocks from the broader medical space that are expected to report earnings soon are Align Technology (ALGN - Free Report) , Cardinal Health, Inc. (CAH - Free Report) and Cencora, Inc. (COR - Free Report) .
The Zacks Consensus Estimate for Align Technology’s second-quarter 2025 adjusted EPS is currently pegged at $2.57. The consensus estimate for revenues is pegged at $1.06 billion. ALGN currently carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Align Technology has an estimated long-term growth rate of 11.2%. However, ALGN’s earnings yield of 5.1% compares unfavorably with the industry’s 5.4%.
Cardinal Health currently has a Zacks Rank #2. The Zacks Consensus Estimate for fourth-quarter fiscal 2025 adjusted EPS is currently pegged at $2.03 and the same for revenues is pinned at $60.67 billion.
Cardinal Health has an estimated long-term growth rate of 10.9%. CAH’s earnings yield of 5.7% compares favorably with the industry’s 5.5%.
Cencora currently carries a Zacks Rank #2. The Zacks Consensus Estimate for third-quarter fiscal 2025 adjusted EPS is currently pegged at $3.78 and the same for revenues is pinned at $80.33 billion.
Cencora has an estimated long-term growth rate of 12.8%. COR’s earnings yield of 5.4% compares favorably with the industry’s 4.1%.