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Why Is United Therapeutics (UTHR) Down 10.7% Since Its Last Earnings Report?
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A month has gone by since the last earnings report for United Therapeutics Corporation (UTHR - Free Report) . Shares have lost about 10.7% in that time frame.
Will the recent negative trend continue leading up to its next earnings release, or is UTHR due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
United Therapeutics Q4 Earnings Decline on High Costs
United Therapeutics reported adjusted earnings of $3.89 per share in the fourth quarter of 2017, which declined 4.2% from the year-ago quarter due to higher operating costs. Earnings, however, beat the Zacks Consensus Estimate of $3.77 per share.
Adjusted earnings excluded the impact of share-based compensation expenses and the impact of tax reforms.
Revenues for the reported quarter were $465 million, beating the Zacks Consensus Estimate of $416 million. Revenues also grew 13.6% year over year. Stronger sales across the PAH franchise pulled up the top line in the quarter.
The Quarter in Detail
United Therapeutics markets four products for the treatment of PAH – Remodulin, Tyvaso, Adcirca and Orenitram.
Adcirca sales were $119.3 million, up 5.9% year over year. Orenitram sales amounted to $48 million in the quarter, up 25.3% year over year due to patient growth. Remodulin sales were $180.1 million, up 19.1% year over year. Tyvaso sales totaled 92.4 million, down 1.3% year over year. Sales of Tyvaso, however, improved sequentially in the quarter. Unituxin’s sales of $24.9 million surged 88.6% year over year.
Research and development (R&D) expenses escalated 96.4% to $91.5 million due to higher costs to support the company’s pipeline of cardiopulmonary and cancer drugs and to develop its organ manufacturing projects.
On the conference call, the company said that R&D costs will continue to rise in 2018 to advance the company’s expanding pipeline. Also royalties paid to Eli Lilly for Adcirca will increase in 2018. Beginning, December 1, 2017, United Therapeutics’ royalty rates on net product sales of Adcirca increased from five percent to ten percent.
Selling, general and administrative (SG&A) expenses rose 8.8% to $69 million.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in fresh estimates. There have been two revisions higher for the current quarter.
United Therapeutics Corporation Price and Consensus
At this time, UTHR has a poor Growth Score of F. Its Momentum is doing a lot better with an A. The stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Our style scores indicate that the stock is more suitable for momentum investors than value investors.
Outlook
Estimates have been trending upward for the stock and the magnitude of these revisions looks promising. Interestingly, UTHR has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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Why Is United Therapeutics (UTHR) Down 10.7% Since Its Last Earnings Report?
A month has gone by since the last earnings report for United Therapeutics Corporation (UTHR - Free Report) . Shares have lost about 10.7% in that time frame.
Will the recent negative trend continue leading up to its next earnings release, or is UTHR due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
United Therapeutics Q4 Earnings Decline on High Costs
United Therapeutics reported adjusted earnings of $3.89 per share in the fourth quarter of 2017, which declined 4.2% from the year-ago quarter due to higher operating costs. Earnings, however, beat the Zacks Consensus Estimate of $3.77 per share.
Adjusted earnings excluded the impact of share-based compensation expenses and the impact of tax reforms.
Revenues for the reported quarter were $465 million, beating the Zacks Consensus Estimate of $416 million. Revenues also grew 13.6% year over year. Stronger sales across the PAH franchise pulled up the top line in the quarter.
The Quarter in Detail
United Therapeutics markets four products for the treatment of PAH – Remodulin, Tyvaso, Adcirca and Orenitram.
Adcirca sales were $119.3 million, up 5.9% year over year. Orenitram sales amounted to $48 million in the quarter, up 25.3% year over year due to patient growth. Remodulin sales were $180.1 million, up 19.1% year over year. Tyvaso sales totaled 92.4 million, down 1.3% year over year. Sales of Tyvaso, however, improved sequentially in the quarter. Unituxin’s sales of $24.9 million surged 88.6% year over year.
Research and development (R&D) expenses escalated 96.4% to $91.5 million due to higher costs to support the company’s pipeline of cardiopulmonary and cancer drugs and to develop its organ manufacturing projects.
On the conference call, the company said that R&D costs will continue to rise in 2018 to advance the company’s expanding pipeline. Also royalties paid to Eli Lilly for Adcirca will increase in 2018. Beginning, December 1, 2017, United Therapeutics’ royalty rates on net product sales of Adcirca increased from five percent to ten percent.
Selling, general and administrative (SG&A) expenses rose 8.8% to $69 million.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in fresh estimates. There have been two revisions higher for the current quarter.
United Therapeutics Corporation Price and Consensus
United Therapeutics Corporation Price and Consensus | United Therapeutics Corporation Quote
VGM Scores
At this time, UTHR has a poor Growth Score of F. Its Momentum is doing a lot better with an A. The stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Our style scores indicate that the stock is more suitable for momentum investors than value investors.
Outlook
Estimates have been trending upward for the stock and the magnitude of these revisions looks promising. Interestingly, UTHR has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.