Teva plunges after disappointing 2018 guidance

Kare Schultz Photo: PR

Teva reported lower revenue and profit in the fourth quarter although higher than analysts' expectations and recorded a huge goodwill impairment of $17.1 billion.

Teva Pharmaceutical Industries Ltd. (NYSE: TEVA; TASE: TEVA) share price is falling sharply after the company provided guidance for 2018. The Israeli company expects 2018 revenue of $18.3 billion to $18.8 billion and earnings per share of $2.25-$2.50 per share. The share price was down 13% in premarket trading on the NYSE after the results were published.

Teva also recorded goodwill impairments in 2017 totaling $17.1 billion, mainly with respect to its US generics unit.

Teva's fourth quarter actually beat the analysts' expectations. Teva reported $5.5 billion revenue in the fourth quarter of 2017, down 5.5% from the corresponding quarter of 2016. The analysts had predicted revenue of $5.3 billion. GAAP net loss was $11.5 billion ($11.40 per share) in the fourth quarter of 2017, compared to a GAAP net loss of $973 million ($1.10 per share) in the fourth quarter of 2016. Non-GAAP net profit was $1 billion ($0.93 per share) in the fourth quarter of 2017, compared with $1.5 billion ($1.38 per share) in the fourth quarter of 2016.

With the introduction of generic competition to Copaxone, revenue of the multiple sclerosis treatment fell 19% in the fourth quarter of 2017 to $821 million from $1.015 billion in the corresponding quarter of 2015. Sales of Copaxone fell even more sharply by 25% in the US to $622 million from $829 million in the fourth quarter of 2016.

Teva president and CEO Kåre Schultz said, “2017 was a challenging year for Teva. Starting 2018 we are focused on meeting our financial obligations and ensuring a much more solid and sustainable business model going forward. We are making strong progress on the restructuring plan, and I am optimistic about the progress made and remain confident in our ability to deliver on our targets in the coming year."

In December, Schultz, who became CEO in November, announced a streamlining plan which involves 14,000 layoffs worldwide, 1,700 of them in Israel.

Revenue in full year 2017 was $22.4 billion, up 2%, or 6% in local currency terms, compared with 2016. 

GAAP net loss in 2017 was $16.3 billion ($16.26 per share)  compared with net profit of $68 million ($0.07 per share) in 2016. Non-GAAP net profit was $4.3 billion ($4.01 per share) in 2017 and $4.01 compared with $5.2 billion ($5.14 per share) in 2016.

Published by Globes [online], Israel business news - www.globes-online.com - on February 8, 2018

© Copyright of Globes Publisher Itonut (1983) Ltd. 2018

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Kare Schultz Photo: PR
Kare Schultz Photo: PR
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