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Teva Shares Fall As Q4 Adj. Profit Misses View, Outlook Disappoints

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Israel-based generic drug maker Teva Pharmaceutical Industries Ltd. (TEVA) on Wednesday reported a loss for the fourth quarter that narrowed from last year as a decline in revenues was more than offset by lower costs and expenses.

However, adjusted earnings per share missed analysts' expectations, while revenues beat estimates. Looking ahead, Teva provided its financial outlook for fiscal 2019 also below expectations. The company's shares are down more than 10 percent in pre-market activity.

Net loss attributable to Teva's ordinary shareholders for the fourth quarter was $2.94 billion or $2.85 per share, narrower than net loss of $11.60 billion or $11.41 in the year-ago period. The year-ago period's results include hefty asset impairment charges.

Excluding items, adjusted earnings for the quarter were $0.53 per share, compared to $0.93 per share in the year-ago period.

Net revenues declined 16 percent to $4.56 billion from $5.40 billion in the previous-year quarter.

On average, analysts polled by Thomson Reuters expected the company to report earnings of $0.54 per share on revenues of $4.52 billion. Analysts' estimates typically exclude special items.

In local currency terms, revenue for the quarter declined 14 percent. The decline in revenues was mainly due to generic competition to Copaxone, lower revenues in the company's U.S. generics business and loss of revenues following the divestment of certain products and discontinuation of certain activities.

Revenues from the company's North America segment declined 17 percent to $2.24 billion, while Europe segment revenues also decreased 17 percent to $1.20 billion. Revenues from the company's International Markets segment fell 19 percent to $740 million.

For fiscal 2019, Teva forecast adjusted earnings of $2.20 to $2.50 per share and revenues in a range of $17.0 billion to $17.4 billion. This compares to adjusted earnings of $2.92 per share and revenues of $18.9 billion in fiscal 2018.

The Street expects earnings of $2.81 per share for the year on revenues of $17.93 billion.

Kåre Schultz, Teva's President and CEO, said, "Looking ahead, we continue to expect that 2019 will be the trough for our business, a year in which we will experience similar challenges to those of 2018 including the continued erosion of Copaxone in the U.S. and Europe as well as the introduction of generics in the ProAir market."

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