In its 3Q16 earnings release, Teva Pharmaceutical (TEVA) projected that its 2016 revenue would fall in the range of $21.6 billion–$21.9 billion. The company also projected that its non-GAAP (generally accepted accounting principles) earnings per share (or EPS) would fall in the range of $5.10–$5.20 in 2016.
Teva Pharmaceutical has also estimated that its number of fully diluted shares at the end of 2016 will be ~1.0 billion.
Wall Street analysts have projected that Teva Pharmaceutical’s non-GAAP EPS will be ~5.33 in 2016, a year-over-year (or YoY) fall of ~1.7%. Analysts expect the company’s EPS to recover and reach $6.08 in 2017. In 2016, Teva’s peers Mylan (MYL), Pfizer (PFE), and Novartis (NVS) are expected to report non-GAAP EPS of ~$4.75, $2.41, and $4.72, respectively.
If Teva Pharmaceutical manages to surpass these EPS targets, its share price could benefit, as could the price of the iShares MSCI EAFE ETF (EFA). Teva Pharmaceutical makes up ~0.30% of EFA’s total portfolio holdings.
Performance in the first nine months of 2016
Teva Pharmaceutical’s 2016 projections are in line with the trends witnessed by the company in the first nine months of the year. While Teva’s net income rose 6% YoY in first three quarters of 2016, its EPS fell 9% YoY in the same time period. This difference can be attributed to the company’s higher number of outstanding shares in 2016 compared to 2015.
Teva Pharmaceutical’s generic business accounted for 48% of its sales and 36% of its operating income in the first nine months of 2016. The Copaxone franchise continues to be Teva’s key growth driver, accounting for 45% of its overall operating income.
In the next article, we’ll explore the current status of Teva Pharmaceutical’s generic business in greater detail.