West Pharmaceutical Services Inc (WST) Announces Q3 2023 Earnings, Updates Full-Year Guidance
West Pharmaceutical Services Inc (NYSE:WST) reports Q3 2023 net sales of $747.4 million, an 8.8% increase from the prior-year period.
Reported-diluted EPS for Q3 2023 stands at $2.14, a 34.6% increase from the previous year.
The company updates its full-year 2023 net sales guidance to a range of $2.950 billion to $2.960 billion.
WST declares a Q4 2023 dividend of $0.20 per share, marking the thirty-first consecutive annual increase in the company's dividend.
West Pharmaceutical Services Inc (NYSE:WST) announced its financial results for the third quarter of 2023 on October 26, 2023. The company reported net sales of $747.4 million, marking an 8.8% increase from the prior-year period. The reported-diluted EPS for the quarter was $2.14, a 34.6% increase from the previous year.
Financial Performance
The company's Proprietary Products segment saw net sales growth of 6.3% to $602.5 million, with organic net sales growth of 3.2%. The Contract-Manufactured Products segment reported net sales growth of 20.8% to $144.9 million, with organic net sales growth of 17.4%.
For the first nine months of 2023, the company reported operating cash flow of $537.4 million, a 9.0% increase. Capital expenditures were $253.3 million, a 33.5% increase over the same period last year. Free cash flow was $284.1 million, a decline of 6.4%.
Updated Full-Year 2023 Guidance
West Pharmaceutical Services Inc (NYSE:WST) updated its full-year 2023 net sales guidance to a new range of $2.950 billion to $2.960 billion, compared to a prior range of $2.970 billion to $2.995 billion. The company also updated its full-year 2023 adjusted-diluted EPS guidance to a new range of $7.95 to $8.00, compared to a prior range of $7.65 to $7.80.
Dividend Announcement
The company's Board of Directors approved a fourth-quarter 2023 dividend of $0.20 per share, a 5.3% increase over the $0.19 per share paid in each of the four preceding quarters. This marks the thirty-first consecutive annual increase in the company's dividend.
CEO Commentary
We had a solid quarter of organic net sales growth, driven by our Proprietary Products high-value product (HVP) and strong Contract Manufacturing components," said Eric M. Green, President, Chief Executive Officer and Chair of the Board. "We are observing a slowdown in restocking trends by large Pharma and Generic customers, which is reflected in our revised guidance. As we look to the fourth-quarter 2023, we anticipate double-digit base, non-COVID-19-related organic sales growth, fueled by strong HVP component demand with certain customers and therapeutic categories."
Outlook
Despite the challenges posed by the slowdown in restocking trends by large Pharma and Generic customers, West Pharmaceutical Services Inc (NYSE:WST) remains optimistic about its performance in the fourth quarter of 2023. The company expects to see double-digit base, non-COVID-19-related organic sales growth, driven by strong demand for its high-value product components.
Explore the complete 8-K earnings release (here) from West Pharmaceutical Services Inc for further details.
This article first appeared on GuruFocus.
