Teva Pharmaceutical Industries Ltd. TEVA is a global pharmaceutical company with a strong presence in the generics market while also having some branded drugs in its portfolio.
Teva faces challenges in the form of generic erosion of key branded drug, Copaxone, new competition for other branded products, pricing erosion in the U.S. generics business, a sparse branded pipeline and a massive debt load. However, its two-year restructuring plan was successful, leading to $3 billion in cost savings by 2019. Its newest drugs Austedo and Ajovy could emerge as significant drivers of long-term sales growth. It is also seeing stabilization in U.S. and European generics business. However, the opioid litigation and price-fixing investigations are an overhang on the stock.
Teva’s earnings performance has been mixed, with the company beating expectations in two of the past four quarters, matching estimates in one and missing the same in the remaining quarter. The four-quarter average earnings surprise is 7.23%.
Currently, TEVA has a Zacks Rank #3 (Hold), 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 second-quarter earnings of 55 cents per share beat the consensus estimate of 51 cents.
Revenues Miss: Teva posted revenues of $3.87 billion, which missed the consensus estimate of $3.92 billion. Sales declined 7% on a reported basis and 5% in constant currency terms year over year due to lower sales of generic and OTC products in all regions.
Key Statistics: North America segment sales were $2.05 billion, down 1% year over year due to lower sales of branded drugs, Copaxone and Bendeka/Treanda and generic products.
Copaxone posted sales of $238 million in North America, down 13% year over year due to generic erosion. Combined sales of Bendeka and Treanda declined 18% to $103 million.
Austedo, a new drug approved to treat chorea associated with Huntington’s disease and tardive dyskinesia, recorded sales of $161 million in the quarter in North America compared with $122 million in the previous quarter. Ajovy, Teva’s new migraine treatment, recorded sales of $34 million in the quarter compared to $29 million in the previous quarter. Generic products revenues declined 2% at $923 million in the North America segment
The Europe segment recorded revenues of $1.0 billion, down 15% (down 13% in constant currency terms) year over year. In the International Markets segment, sales declined 16% (down 9% in constant currency terms) to $488 million.
2020 Outlook: Teva maintained its previously issued guidance for 2020. It expects revenues to be in the range of $16.6 - $17.0 billion. Earnings are expected in the band of $2.30-2.55 per share.
Share Price Impact: Shares rose more than 3% pre-market trading.
Teva Pharmaceutical Industries Ltd. Price and Consensus
Teva Pharmaceutical Industries Ltd. price-consensus-chart | Teva Pharmaceutical Industries Ltd. Quote
Check back later for our full write up on this TEVA earnings report later
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