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Why Is Emergent Biosolutions (EBS) Down 23.6% Since Last Earnings Report?

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It has been about a month since the last earnings report for Emergent Biosolutions (EBS - Free Report) . Shares have lost about 23.6% in that time frame, outperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is Emergent Biosolutions due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.

Emergent Earnings Miss in Q4, Revenues Beat Estimates

Emergent BioSolutions reported fourth-quarter 2019 earnings of $1.57 per share, which missed the Zacks Consensus Estimate of $1.67. However, the bottom line increased significantly from the year-ago earnings of 78 cents.

Revenues in the reported quarter surged 33.1% from the prior-year period to $360.4 million, primarily backed by high product sales owing to the company’s recent acquisitions and other product sales. The top line also beat the Zacks Consensus Estimate of $351 million.

Quarter in Detail

Total product sales jumped 43% to $310.8 million from the year-earlier quarter. This revenue rise was mainly on the back of contribution from Narcan nasal spray and higher sales of small pox vaccine ACAM2000. Newly-acquired product, Narcan (naloxone HCl) nasal spray added $66.9 million to product sales, jumping 60% year over year.

ACAM2000 added $78.5 million to product sales in the reported quarter. Other product sales also soared 75% on a year-over-year basis to $72.5 million.

However, anthrax vaccines (BioThrax and AV7909) sales declined 31% to $92.9 million in the reported quarter.

Revenues from contracts and grants decreased 9% year over year to $24.1 million, primarily due to reduced activities associated with certain funding programs.

Contract manufacturing revenues fell 5% to $25.5 million from the year-ago figure. This downside was primarily due to the contracted service work that took place in fourth-quarter 2018 but did not recur in the same period last year.

The company recorded adjusted EBITDA of $134.3 million in the reported quarter compared with $76.2 million in the year-ago period.

2020 Outlook

Emergent anticipates revenues of $1.18-$1.27 billion for 2020. The company expects adjusted net income within $160-$210 million while adjusted EBITDA is anticipated in the band of $300-$360 million.

In the first quarter of 2020, the company expects total revenues within $190-$215 million.

How Have Estimates Been Moving Since Then?

Analysts were quiet during the last two month period as none of them issued any earnings estimate revisions.

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