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Teva Quarterly Report Meets Analyst Expectations

Teva Quarterly Report Meets Analyst Expectations

The Israeli drugmaker’s revenues dropped 6% in the third quarter of 2019 to $4.26 billion. Debt dropped by $1.8 billion to $26.9 billion

Sophie Shulman  :  2019-11-07T16:32:06..

Teva Pharmaceutical Industries Ltd. published its third quarter reports for 2019 Thursday, closing July to September with a 6% year-over-year drop in revenues, to $4.264 billion. The decrease was mostly due to heightened generic competition to multiple sclerosis drug Copaxone. The company met the consensus estimate for the quarter, however. The company also announced Eli Kalif will replace Michael McClellan as chief financial officer.

Teva reported non-GAAP net income of $637 million, or $0.58 earnings per share, compared to $694 million or $0.68 EPS in the third quarter of 2018. Teva’s main revenue decrease can be attributed to its lessened Copaxone sales, especially in the U.S. market, where the company saw a 41% decrease year-over-year to $271 million. In Europe, Copaxone sales dropped 14% year-over-year to $106 million. Austedo and Ajovy, meant to take Copaxone’s place, also performed disappointingly in absolute numbers: Austedo sales jumped 71% in the U.S. to $107 million, while Ajovy only recorded sales of $25 million this quarter, after achieving $23 million in the second quarter of 2019.

Teva CEO Kåre Schultz. Photo: Sivan Farage Teva CEO Kåre Schultz. Photo: Sivan Farage Teva CEO Kåre Schultz. Photo: Sivan Farage

One positive surprise on the report was Teva’s $551 million free cash flow. Debt dropped by $1.8 billion to $26.9 billion, with CEO Kåre Schultz stating that Teva remains “on track to achieve our two-year restructuring target of a $3 billion spend base reduction.”

Teva slightly revised its full-year outlook, upping its annual net revenues forecast to between $17.2 billion and $17.4 billion (up from $17 billion to $17.4 billion). Its operating income was upped from between $3.8 billion and $4.2 billion to between $4 billion and $4.2 billion. EBITDA was upped from between $4.4 billion and $4.8 billion to between $4.5 billion and $4.8 billion.

Teva’s stock dropped 48% on NYSE since the beginning of the year, but climbed 20% this past month following developments in the opioid damages cases against the company. Though the final settlement has not yet been signed, Teva has written off $468 million for legal settlements and loss contingencies this quarter, mainly related to opioid lawsuits. Teva has written off $646 million in the second quarter of 2019 for the same reason. Taking into account all write-offs and money put aside, Teva’s quarter ended with a loss per share of $0.29. 
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