Teva (TEVA) Q1 Earnings: Will The Stock Deliver A Surprise?
Zacks Investment Research | May 04, 2016 10:08PM ET
Teva Pharmaceutical Industries Limited (NYSE:TEVA) is scheduled to report its first-quarter 2016 earnings results on May 9, before the opening bell. Teva’s fourth quarter earnings were in line with expectations. Let’s see how things are shaping up for this announcement.
Factors at Play
At the time of announcing fourth quarter results, Teva had guided towards first quarter revenues of $4.7 billion - $4.9 billion. First quarter revenues will continue to be impacted by exchange rates. Meanwhile, earnings are expected in the range of $1.16 - $1.20 per share.
Teva’s generic segment could continue seeing some weakness as in the fourth quarter when generic segment revenues declined 9%. Revenues from the U.S. generics business had declined 15% reflecting a decline in sales of the generic versions of Lovaza, Pulmicort, and Xeloda. During the first quarter, Teva launched its generic version of Ortho Tri-Cyclen Lo and another dosage strength of its generic version of Pulmicort Respules.
The EU generics segment will remain under pressure with sales being affected by macro-economic conditions, currency fluctuations and healthcare reforms.
However, Teva’s position in the generics market should strengthen with the completion of the acquisition of Allergan’s (NYSE:AGN) generics segment.
Meanwhile, in the branded segment, investors will remain focused on the Copaxone franchise’s performance considering the 20 mg version of the multiple sclerosis treatment is facing generic competition in the form of Glatopa.
Teva continues to focus on its cost reduction program.
Surprise History
Teva’s performance has been strong with the company reporting positive earnings surprises in three of the last four quarters. The average earnings surprise over the last four quarters is a positive 5.44%.
Earnings Whispers?
Our proven model does not conclusively show that Teva is likely to beat estimates this quarter. That is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), #2 (Buy) or #3 (Hold) to be able to beat earnings. That is not the case here as you will see below.
Zacks ESP: Earnings Surprise Prediction or Zacks Investment Research
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