Dr. Reddy’s Laboratories (RDY) reported first quarter fiscal 2014 earnings per American Depositary Share (ADS) of 40 cents, below the Zacks Consensus Estimate of 44 cents, but above the year-ago earnings of 30 cents per ADS.
The company reported revenues of $478 million during the quarter, reflecting year-over-year increase of 12%. Revenues during the quarter were, however, well below the Zacks Consensus Estimate of $551 million.
Dr. Reddy’s launched 23 new generic products, filed 12 registrations for new products and also filed 5 drug master files (DMFs) globally in the first quarter.
Quarter in Detail
Dr. Reddy’s reports revenues under three segments – Global Generics, Pharmaceutical Services & Active Ingredients (:PSAI) and Proprietary Products and Others. Revenues at the Global Generics segment were up 15% to $368 million. Strong sales in North America and emerging markets led to the growth at the Global Generics division.
Generics revenues increased in North America (up 37%), Russia and other CIS (Commonwealth of Independent States) markets (up 8%), and the rest of the world, or RoW (up 12%) while it was flat in India and down 28% in Europe. Revenues in India were affected by trade strike in Maharashtra and the new pricing policy which led to lower inventory levels.
PSAI revenues climbed 6% to $99 million during the quarter. The slight growth in this segment was due to a fewer number of new product launches. Revenues in the Proprietary Products and Others segment declined 16% to $11 million during the quarter.
Selling, general and administration (SG&A) expenses including amortization amounted to $148 million, reflecting an increase of 6% year over year. The increase was due to normal salary increments and rupee depreciation against many currencies. Research and development (R&D) expenses increased 55% to $41 million driven by planned R&D activities.
During the quarter, Dr. Reddy’s launched 2 new products - generic versions of Novartis AG’s (NVS) Reclast and GlaxoSmithKline plc's (GSK) Lamictal XR. Dr. Reddy’s also filed 2 abbreviated new drug applications (ANDAs) with the U.S. Food and Drug Administration (:FDA). The company has 64 ANDAs pending approval with the FDA, of which 38 are Para IV filings and 8 are first-to-file.
Dr. Reddy’s carries a Zacks Rank #3 (Hold). Actavis, Inc. (ACT) currently looks well positioned with a Zacks Rank #2 (Buy).
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