Teva Pharmaceutical Industries (NYSE: TEVA – $44.85) reported higher quarterly earnings that beat analysts’ estimates on higher U.S. generic drug sales and global revenue from specialty medicines. Specifically:
- Fourth quarter 2013 net revenues was $5.4 billion, an increase of 3% over last year’s final quarter vs. analysts’ forecast of $5.19 billion.
- Fourth quarter adjusted per share earnings of $1.42 beat analysts’ estimates by two cents and an increase of 19% over last year.
- Sales of generic drugs in the U.S. rose 14% in the quarter due to several product launches in the third and fourth quarters of 2013. European generic sales fell 2% due to a contraction of the market in France, partly offset by higher revenue in the UK and Italy.
- Global sales of its best-selling multiple sclerosis drug Copaxone, which account for about 20% of sales and 50% of profit, rose 8% in the quarter to $1.14 billion.
- Teva reaffirmed its 2014 outlook of earnings per share of $4.20-$4.50 on revenue of $19.3 billion-$20.3 billion if rivals are allowed to launch cheaper versions of Copaxone. It sees EPS of $4.80-$5.10 on revenue of $19.8 billion-$20.8 billion without competition.
The Israeli-based company is facing expected generic competition for Copaxone over the next six to eighteen months and has striven to cope with competition from lower-priced generic medicines from rival drug makers in India, which have squeezed margins on Teva’s already-low-margin generics. Nonetheless, the shares have rebounded nicely from its November lows and offer an above average dividend yielding 2.8%. While far from being out of the woods with its restructuring plan and dependence on Copaxone, the shares can be held in a well-diversified aggressive account for further recovery.