Teva (TEVA): Q1 EPS of $1.47 beats by $0.03. Net revenue of $5.1B (+25% Y/Y) misses by $0.4B....

This news story has 9 comments:

Register or Login to rate comments »

nedthebull Comments (11)
 
So....is this good? Will it be well received tomorrow by the market? Btw how do you beat on EPS and yet revenue comes in under projections? I'm just the "man on the street" type of investor and "that don't make no sense":)
9 May 2012, 03:15 AM Reply Like

Spencer Knight Comments (350)
 
It happens a lot. EPS (earnings per share) is basically based on shares outstanding. If you buyback and thus retire shares it lowers your outstanding share count and EPS can be higher. Sometimes companies purposely buyback shares to make their earnings per share look better. I don't follow TEVA enough so I don't know if they have had any buybacks. Of course I do follow TEVA enough to check their earnings... Other reasons could be that TEVA has outstanding operational efficiency so they can turn a profit off less revenue.

You also have to remember those estimates are provided by "the experts." Therefore the expectations may not follow a direct 1 for 1 correlation. In other words EPS and revenue estimates are based on different assumptions and research so they differ. Its far from an exact science.
9 May 2012, 04:25 AM Reply Like

PeterScriabin Comments (140)
 
Ned, apart from the excellent points Spencer raised, EPS accounts for costs as well as revenues. If lemons and sugar get cheaper, and Lucy's wages are reduced, then lemonade-stand profits may be higher, despite not selling as many drinks as yesterday. (Of course, revenues account for price changes as well as quantities sold, but you hopefully get the idea).
9 May 2012, 07:51 AM Reply Like

Hellz Comments (161)
 
What do you mean look? They are better! I think mainly it's due to healthy growth in branded drugs (high margin) and disappointment in Europe for generic medicine.

You'd think generic medicine wouldn't be affected much by economic downturns. ;) Anyway, the results aren't that bad.
9 May 2012, 08:16 AM Reply Like

ezy2likeme Comments (3)
 
Surprised you got sucked in by the analysts on WallSt. Who know nothing about operating a company. Doubt company guided anything less than conservative and analysts have their own agenda. Maybe TEVA has a lousy Sales Mgr and a good accountant LOL
9 May 2012, 09:54 PM Reply Like

mitrado Comments (1366)
 
Best way to see how this is received by the market is to check the price action over Tel Aviv Stock Exchange: http://bit.ly/KLwZxG;
9 May 2012, 04:10 AM Reply Like

holbornnine Comments (173)
 
The stock is looking like it will open below $44 ... $43.80 ish !! The revenue miss is enormous , 10%.

Disc: Long TEVA ... could be nasty today !
9 May 2012, 06:19 AM Reply Like

Energysystems Comments (395)
 
It'll probably open lower, but as a shareholder, it was a good quarter in my view. Revenues up 25% yoy, gaap net up .97 from last years .84 cents per share, non-gaap up 1.47 from 1.07 a year ago. Looks like divi was increased(atleast from a quick conversion check) from .19 to around .26.
9 May 2012, 08:04 AM Reply Like

gjg49 Comments (296)
 
Two items:
Branded products (Copaxone and stuff brought in via Cephalon) grew much faster than generics and should have much higher margins (as Heliz mentioned above). For background, gross margins (sales relative to the cost to manufacture and physically distribute the product) on generic products run much lower (examples for 2011: MYL gross mgns of 41% and WPI gross mgns of 44%) than for patented products (LLY 2011 gross mgn 79%, PFE gross mgn 78%, and MRK 2011 gross margin 64%). Teva's upside came from the addition of sales of several Cephalon products and growth in Copaxone--hence, they made more profit per dollar of sales; an incremental dollar of branded sales can probably make up for 3 or 4 dollars of generic revenue missed if they managed the other expenses down. Theoretically, this is good, except that Copaxone may face generic competition within a couple of years and it will be very difficult to offset the lost sales when the price plummets.

Second, cash flow from operations DECLINED year over year despite the reported non-GAAP EPS gains. I don't own Teva, so I am not pursuing why this happened, but the cash flow implies questions about the quality of earnings.
9 May 2012, 12:18 PM Reply Like