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Endo (ENDP) Q3 Earnings & Revenues Beat Estimates, Down Y/Y

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Endo International plc ENDP reported better-than-expected results for third-quarter 2019.

The company’s earnings of 60 cents in the reported quarter easily beat the Zacks Consensus Estimate of 53 cents. However, earnings declined from 71 cents in the year-ago quarter.

Revenues came in at $729.4 million in the quarter, surpassing the Zacks Consensus Estimate of $707.6 million but decreasing 2% from the year-ago quarter. The year-over-year decrease was primarily attributable to competitive pressure in the Generic Pharmaceuticals segment and the Established Products portfolio of the Branded Pharmaceuticals segment. Nevertheless, strong growth in the Sterile Injectables segment and the Specialty Products portfolio of the Branded Pharmaceuticals segment partially offset the decline.

Endo International plc Price, Consensus and EPS Surprise


Endo International plc Price, Consensus and EPS Surprise

Endo International plc price-consensus-eps-surprise-chart | Endo International plc Quote

Quarterly Highlights

Endo has four reportable business segments — Branded Pharmaceuticals, Generic Pharmaceuticals, Sterile Injectables and International Pharmaceuticals.

Branded Pharmaceuticals revenues were $217 million, down from $220 million in the year-ago quarter due to the ongoing generic competition in the Established Products portfolio.  Specialty Products revenues increased 18% to $132 million, driven by the continued strong performance of Xiaflex. Sales of Xiaflex rose 29% to $83 million, owing to higher demand in Peyronie's Disease and Dupuytren's Contracture indications, driven by continued commercial execution and investment in promotional activities.

During the reported quarter, Endo submitted a Biologics License Application to the FDA for its Collagenase Clostridium Histolyticum product for the treatment of cellulite. 

Sterile Injectables revenues came in at $264 million, up 11% year over year, driven by strong growth of Adrenalin, Vasostrict and Aplisol.

Generic Pharmaceuticals recorded sales of $218 million in the quarter, down 15% due to competitive pressure in the generic business. Nevertheless, the contribution of certain product launches including, colchicine tablets (the authorized generic of Colcrys) partially offset the decline.

International Pharmaceuticals revenues were $30 million, flat year over year.

2019 Outlook

Endo expects revenues between $2.86 billion and $2.89 billion for 2019 compared to the previous guidance of $2.76-$2.96 billion.  The company anticipates earnings from continuing operations to be $2.10-$2.25 compared to the previous guidance of $2.00-$2.25 per share.

Other Update

Concurrent with third-quarter results, Endo announced that president and chief executive officer Paul V. Campanelli plans to retire.

Our Take

Endo reported better-than-expected results for the third quarter of 2019, wherein it beat on both earnings and sales. However, the decline in revenues due to competitive pressure in the generic pharmaceuticals segment is a concern. The company is looking to turn around its business, with focus on the Branded Pharmaceuticals segment in the United States.

However, shares were down in after-market trading. Notably, shares of Endo have lost 33.5% in the year so far against the industry’s 4.2% growth. It has been embroiled in various opioid litigations lately, which affected the share price.

Zacks Rank & Stocks to Consider

Endo currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in this space are FibroGen FGEN, Lannett Inc. (LCI - Free Report) and Portola Pharmaceuticals PTLA. All stocks carry a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

FibroGen’s loss per share estimates have narrowed from $1.09 from 37 cents for 2019 in the past 90 days.

Portola’s loss per share estimates have narrowed from $3.83 to $3.77 for 2019 in the past 60 days.

Lannett’s loss per share estimates have increased to $1.25 from $1.18 in the past 60 days.

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