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It has been about a month since the last earnings report for United Therapeutics (UTHR). Shares have lost about 0.3% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is United Therapeutics 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.
United Therapeutics Q4 Earnings Miss, Sales Beat
United Therapeutics reported earnings of $2.19 per share for the fourth quarter of 2020, which missed the Zacks Consensus Estimate of $2.97 per share. Earnings were higher than the year-ago earnings of $1.20 per share.
The abovementioned earnings include the impact of share-based compensation expenses, unrealized gains/losses on investments in privately-held companies, license related fees and other items. Excluding these items, adjusted earnings were $3.31 per share, up 68.9% year over year.
Revenues for the reported quarter were $384.9 million, which beat the Zacks Consensus Estimate of $356.0 million. Revenues rose 24% year over year.
United Therapeutics markets four products for pulmonary arterial hypertension (PAH) — Remodulin, Tyvaso, Adcirca and Orenitram. Higher sales of Orenitram, Remodulin and Tyvaso offset lower sales of Unituxin and Adcirca in the quarter.
Quarter in Detail
Orenitram sales amounted to $74.0 million in the reported quarter, up 45% year over year due to higher volumes resulting from patient growth, following an expanded Orenitram label, reflecting the FREEDOM-EV results.
Tyvaso sales totaled $131.7 million, up 44% year over year, gaining from higher volumes as a result of patient growth and price increases. Remodulin sales were $127.9 million, up 19% year over year.
Meanwhile, fourth-quarter 2019 revenues were hurt by a “corrected order” by a U.S. distributor, which reduced revenues in the quarter. Excluding this one-time 2019 operation in the distributor order patterns, U.S. Remodulin sales would have been flat while sales of Tyvaso and Orenitram would have risen 27% and 30%, respectively in the fourth quarter of 2020.
Adcirca sales were $21.6 million, down 22% year over year as generic competition resulted in continued erosion of market share in the quarter. Unituxin’s (for the treatment of pediatric patients with high-risk neuroblastoma) sales of $29.7 million were down 12% year over year.
Research and development (R&D) expenses were $126.1 million in the quarter, up 11% year over year. Selling, general and administrative expense rose 51% to $158.7 million in the quarter.
Total revenues for 2020 came in at $1.48 billion, up 2.4% year over year. Adjusted earnings were $14.46 per share, up 11.8% year over year.
In 2021, United Therapeutics plans to launch four new products and indications, while Remunity Pump has already been launched. Tyvaso Inhalation Solution in PH-ILD, Tyvaso DPI and ISR for Remodulin are expected to be launched later in the year.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision have trended downward during the past month. The consensus estimate has shifted -21.66% due to these changes.
Currently, United Therapeutics has an average Growth Score of C, a grade with the same score on the momentum front. Charting a somewhat similar path, the stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Estimates have been broadly trending downward for the stock, and the magnitude of this revision indicates a downward shift. Notably, United Therapeutics has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.