Dr. Reddy's Laboratories Ltd. (RDY - Free Report) reported first-quarter fiscal 2018 earnings per American Depositary Share (ADS) of 6 cents, down from 12 cents in the year-ago quarter.
Revenues increased 2.4% year over year to $513 million.
Notably, the company’s share price declined 18.8% year to date against the Zacks classified industry’s gain of 0.4%.
Quarter in Detail
Dr. Reddy’s reported revenues under three segments – Global Generics, Pharmaceutical Services & Active Ingredients (PSAI), and Proprietary Products and Others.
Global Generics revenues rose 3.2% year over year to $425 million during the first quarter.
PSAI revenues were $72 million, leading to a marginal decline of 1.4% year over year.
Revenues at the Proprietary Products and Others segment came in at $16 million, in line with the year-ago quarter.
Furthermore, research and development expenses were up 6.8% year over year to $79 million.
Also, selling, general and administrative expenses were $182 million, down 4.2% year over year.
As of Jun 30, 2017, the company has 99 generic filings (97 abbreviated New Drug Applications (ANDAs) and two new drug applications) that are pending for the FDA approval. Of these 97 ANDAs, 59 were Para IV filings and 26 have “first-to-file” status.
Dr. Reddy’s witnessed year-over-year decline in the bottom line in first-quarter fiscal 2018, but sales rose year over yearEarnings came in below expectations due to price erosion due to U.S. customer consolidation, lower contribution from new product launches in the U.S. and the GST implementation in India.. Higher expenses related to product launches, along with reduced remediation costs, might put pressure on profits, going forward.
Nevertheless, we remain positive on the company’s efforts to expand its biosimilar portfolio, particularly in the emerging markets over the next few years.
Zacks Rank & Stocks to Consider
Dr. Reddy’s currently has a Zacks Rank #4 (Sell). Better-ranked health care stocks in the same space include Enzo Biochem, Inc. , Exelixis, Inc. (EXEL - Free Report) and Sanofi (SNY - Free Report) . While Enzo Biochem and Exelixis sport a Zacks Rank #1 (Strong Buy), Sanofi carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
Enzo Biochem’s loss per share estimates narrowed from 12 cents to 7 cents for 2017 and from 11 cents to 3 cents for 2018, over the last 60 days. The company delivered positive earnings surprises in all the trailing four quarters, with an average beat of 55.83%. The share price of the company has increased 58.2% year to date.
Exelixis’ earnings per share estimates increased from 53 cents to 55 cents for 2018 over last 30 days. The company pulled off positive earnings surprises in all the trailing four quarters, with an average beat of 512.11%. The share price of the company has increased 85.3% year to date.
Sanofi’s earnings per share estimates increased from $3.18 to $3.24 for 2017 and from $3.30 to $3.38 for 2018, over last 30 days. The company came up with positive earnings surprises in two of the trailing four quarters, with an average beat of 5.10%. The share price of the company has increased 17.6% year to date.
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