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Teva (TEVA) Q3 Earnings Miss, Sales Top Estimates, Stock Up

Zacks Equity Research

Israel-based Teva Pharmaceutical Industries Ltd. TEVA is a global pharmaceutical company with a strong presence in the generics as well as branded markets. The company’s branded products include Copaxone (multiple sclerosis), Austedo (chorea associated with Huntington’s disease and tardive dyskinesia), respiratory products like ProAir and Qvar and Ajovy (preventive treatment of migraine).

Teva is facing significant challenges in the form of accelerated generic competition for Copaxone, new competition for branded products, pricing erosion in the U.S. generics business and a massive debt load. However, it has made impressive progress on restructuring activities and has a more stable financial position than before. However, we believe the company has a long way to go before it gains stability.

Teva’s earnings surpassed expectations in three of the last four reported quarters, with the average positive surprise being 6.30%.

Currently, TEVA has a Zacks Rank #2 (Buy), 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 Miss: Teva’s third-quarter earnings came in at 58 cents per share which missed the consensus estimate of 60 cents.

Revenues Beat: Teva posted revenues of $4.26 billion, which beat the consensus estimate of $4.24 billion. Sales declined 6% (down 5% in constant currency terms) year over year.

Key Statistics:  North America segment sales were $2.05 billion, down 9% year over year due to lower sales of Copaxone as well as Bendeka/Treanda.

Copaxone posted sales of $271 million in North America, down 41% year over year due to generic erosion. Combined sales of Bendeka and Treanda declined 23% to $124 million. Austedo, a new drug, recorded sales of $105 million in the quarter in North America compared with $96 million in the previous quarter. Ajovy, Teva’s new migraine treatment, recorded sales of $25 million in the quarter compared with $23 million in the previous quarter. Generic products revenues declined 1% at $914 million in the North America segment.

The Europe segment recorded revenues of $1.16 billion, down 4% (flat in constant currency terms) year over year. In the International Markets segment, sales rose 1% (same in constant currency terms) to $736 million.

2019 Outlook Upped: Teva raised the lower end of previously issued guidance for sales and earnings in 2019. The company expects revenues to be in the range of $17.2 - $17.4 billion versus $17 - $17.4 billion expected previously. Earnings are expected in the band of $2.30-2.50 per share versus $2.20-2.50 per share expected previously.

Share Price Impact: Shares were up more than 1% in pre-market trading.


Teva Pharmaceutical Industries Ltd. Price and Consensus

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