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Teva (TEVA) Q4 Earnings & Sales Beat, 2018 View Disappoints

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Israel-based Teva Pharmaceutical Industries Ltd. (TEVA - Free Report) is a global pharmaceutical company with a strong presence in the generics as well as branded markets. The company’s branded products include Copaxone (multiple sclerosis), Azilect (Parkinson’s disease) and respiratory products like ProAir and Qvar.  Moreover, the company has several candidates in its pipeline, which are in different stages of development mainly for the treatment of pain and asthma.

In early Aug 2016, Teva acquired Allergan’s generics business – Actavis Generics and in Oct 2016 it acquired the latter’s Anda Inc., the 4th largest distributor of generic pharmaceuticals in the U.S.

Teva is facing significant challenges including generic competition for Copaxone, pricing erosion in the U.S. generics business, lower-than-expected contribution from new generic launches and a massive debt load.

Teva’s earnings have surpassed expectations in only one of the last four quarters, met the same in one and missed expectations in the remaining two, resulting in an average negative surprise of 2.66%. Estimates have gone down over the past seven days.

Currently, TEVA has a Zacks Rank #4 (Sell), but that could definitely change following the company’s earnings report which was just released. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

We have highlighted some of the key stats from this just-revealed announcement below:

Earnings Beat: Teva’s fourth quarter earnings came in at 93 cents per share, which beat Zacks consensus estimate of 81 cents per share.

Revenues Beat: Teva posted revenues of $5.46 billion, which beat consensus estimates of $5.42 million. However, sales declined 16% year over year.

Key Statistics: Generic segment sales were $3.1 billion, down 16% year over year while Specialty segment sales were $1.8 billion, down 19%.

Lead branded product, multiple sclerosis drug Copaxone, posted worldwide sales of $821 million, down 19% due to generic competition.

Glatopa, a generic version of Copaxone 20 mg, is being marketed by Momenta and Sandoz since 2015 while Mylan launched its version of the 20 mg formulation in Oct 2017. In Oct 2017, in a major blow to Teva, Mylan launched (at-risk) its generic version of the 40 mg thrice-weekly formulation, much earlier than expected. With the entry of the generic version of the 40 mg formulation and the entry of a second generic version of the 20 mg formulation, there has been a rapid erosion in sales of Copaxone.

2018 Outlook Below Expectations: Teva expects revenues in a range of $18.3 - $18.8 billion which fell short of the Zacks Consensus Estimate of $19.17 billion. The company expects earnings in a band of $2.25–$2.50 per share in 2018 which also fell short of the Zacks Consensus Estimate of $2.93 per share.

Share Price Impact: Shares were down more than 11% in pre-market trading.

Check back later for our full write up on this TEVA earnings report later!

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