Teva’s Sales Fell in 1Q18 but Exceeded Estimates

Teva’s 1Q18 sales performance

Teva Pharmaceutical Industries (TEVA) registered sales of $5.1 billion in fiscal 1Q18, representing a YoY (year-over-year) decline of 10%. However, sales came in ahead of the analysts’ estimates of $4.8 billion. The company registered sales of $5.5 billion in 4Q17, which represented a YoY decline of 16%.

Teva’s Sales Fell in 1Q18 but Exceeded Estimates

The decline in sales in fiscal 1Q18 was due to the continued impact of the US generics market dynamics and competition for Copaxone. Further, certain planned divestments and the discontinuation of certain businesses impacted Teva’s sales in fiscal 1Q18. Foreign exchange positively impacted Teva’s 1Q18 sales by $240 million.

Geography-wise sales in 1Q18

In fiscal 1Q18, generic competition for Copaxone and the US generics market dynamics led to a YoY decline of ~22% in Teva’s North America sales, which came in at $2.5 billion. However, in Europe, the company registered a strong performance primarily driven by the new generic launches.

In fiscal 1Q18, growth markets sales registered growth of ~4% mainly driven by the improvement of the company’s performance in Israel and Japan and Takeda’s approval for Azilect. However, Teva’s sales growth in growth markets was partially offset by the women’s health business divestment, the Hungary distribution activities closure, Venezuela deconsolidation, and the impact of non-recurring Ninlaro transaction-related payments last year.

Analysts’ sales estimates for 1Q18

For fiscal 2Q18, Wall Street analysts have a sales estimate of $4.7 billion for Teva. These estimates represent an expected decline of 17.3% in sales, on a YoY basis. For 2018, analysts expect sales of $18.9 billion, a decline of 15.6%. Teva expects to register full fiscal 2018 sales in the range of $18.5 billion to $19 billion. The company has increased its full fiscal guidance amid a better-than-expected 1Q18 performance.

Peers Eli Lily (LLY), Pfizer (PFE), and Mylan (MYL) reported sales growth of 9%, 1%, and -1.3%, respectively, in their recently reported quarters.

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