Teva revenue beats expectations, profit misses: market reacts
Teva reported $4.1 billion in revenue, exceeding analyst forecasts. Net profit was 2 cents per share versus the expected 11 cents, due to Emalex acquisition costs. The company raised its annual revenue guidance, and shares are up over 4% in Tel Aviv.
Following a period of stock weakness and a double-digit decline from its recent peak, Teva's financial results published on Wednesday led to an increase in share price. Teva recorded revenue of $4.1 billion, surpassing the analysts' forecast of approximately $4 billion. On the bottom line, the company reported a Non-GAAP net profit of 2 cents per share, lower than the expected 11 cents, due to expenses related to the acquisition of Emalex.
The company slightly raised its annual revenue guidance to $16.5–16.85 billion, compared to the previous $16.4–16.8 billion. Forecasts for adjusted EBITDA ($4.23–4.53 billion) and Non-GAAP net profit ($1.91–2.11 per share) remain unchanged.
The revenue guidance hike is driven by the success of core original products. Teva raised its sales forecasts for three key drugs: Austedo (movement disorders) at $2.45–2.6 billion, Ajovy (migraine) at $850–870 million, and Uzedy (schizophrenia) at $270–290 million.
Richard Francis, President and CEO of Teva, stated:
"Our second-quarter results reflect the continued execution of our 'Pivot to Growth' strategy. Our core innovative products together generated revenue of over $1 billion, continuing to reshape Teva's product mix and financial profile. We are strengthening our pipeline in neurology and immunology, expanding access to biosimilars, and advancing modernization to support sustainable growth."
In the second quarter, revenue totaled $4.1 billion, nearly unchanged from the same period last year. Under GAAP, Teva reported a net loss of $576 million, compared to a $282 million profit in the corresponding quarter. The gap between the GAAP loss and Non-GAAP profit is attributed to the amortization of intangible assets and legal costs. Expenses of $726 million related to the Emalex acquisition reduced net profit by 61 cents.
As of the end of June, Teva's debt stood at $16.6 billion, with 27% being short-term. Recently, Teva's credit rating was upgraded to investment grade for the first time in a decade.
Teva announced a transition to a direct listing of its ordinary shares on the New York Stock Exchange, replacing the current American Depositary Shares (ADS). The company expects this move to broaden its global shareholder base and support inclusion in major stock indices. CFO Eli Kalif noted that this change will make Teva's shares more accessible to a wider range of investors.
Recent developments include the completion of the Emalex acquisition, which is developing a treatment for Tourette syndrome, and positive clinical trial results for vitiligo. Conversely, the company announced plans to gradually lay off 250 employees in Israel after failing to sell its TAPI raw materials division.
Teva's stock has declined by 12.9% since its peak last May. The company currently holds a market capitalization of $36.9 billion.
