Actavis Tops 1Q Earnings By Wide Margin, Provides Outlook
Actavis plc’s (ACT - Analyst Report) first quarter 2015 earnings came in at $4.30 per share, beating the Zacks Consensus Estimate of $3.84 per share by a huge margin and increasing 23.2% from the year-ago period.
Actavis Inc. - Earnings Surprise | FindTheCompany
Revenues for the reported quarter came in at $4.23 billion, up 59% from the year-ago period, beating the Zacks Consensus Estimate of $4.05 billion.
Reported quarter results included the impact of the Allergan acquisition, effective Mar 17.
Quarterly Details
Actavis has three revenue producing segments -- North American Brands, North American Generics and International (generic, branded generic, brands outside North America and over-the-counter pharmaceutical products) and Anda Distribution.
North American Brands revenue soared to $1.74 billion (up significantly from $594 million in the year-ago period), driven by the Forest acquisition and the performance of legacy products like Lo Loestrin ($83.3 million), Minastrin 24 Fe ($65.4 million), and Estrace Cream ($71.9 million). Products like Bystolic ($164.1 million) and Linzess ($96.2 million) also performed well.
Actavis continues to convert patients to Namenda XR. The company said that about 49% patients have been converted.
CNS, gastroenterology, women's health, cardiovascular, respiratory & acute care, urology, infectious disease and dermatology/established brands revenues came in at $541.6 million, $376.6 million, $267.5 million, $215.9 million, $68.3 million, $37.8 million and $228.3 million, respectively.
North American Generics revenues were $1.78 billion, up 6.4% from the year-ago period. Generic Concerta and Lidoderm performed well and results were boosted further by the new launches of generic versions of Intuniv and OxyContin.
International revenues declined 14% from the year-ago period to $558 million reflecting the divestiture of Western European assets in the second quarter of 2014 as well as the negative impact of currency movement.
Net revenues from the Anda Distribution segment increased 18% during the quarter to $462 million reflecting higher product mix to chain drug stores.
Provides 2015 Outlook
Actavis, which acquired Botox maker Allergan in Mar 2015, provided its preliminary outlook for 2015. While the company expects earnings in the range of $17.00 - $18.50 per share, pro forma revenues are expected in the range of $22.0 - $22.5 billion (reported revenues of $20.5 - $21 billion). The Zacks Consensus Estimate for earnings and revenues currently stand at $17.81 per share and $21.7 billion, respectively.
Actavis has almost completed its pipeline prioritization efforts as well and has identified 70 projects for continued development including more than 50 in late-stages/regulatory stage of development.
Our Take
Actavis’ first quarter results were once again strong with the company easily beating on the top- and bottom-line. We remain optimistic about Actavis’ growth prospects. We are positive on the Forest acquisition which is in line with Actavis’ strategy of building its branded product portfolio. Meanwhile, the Durata acquisition has boosted Actavis’ infectious disease portfolio. The Allergan acquisition also looks good to us. We are encouraged by Actavis’ focus on building its branded and biosimilars pipeline.
Actavis is a Zacks Rank #3 (Hold) stock. Some better-ranked stocks in the health care sector include Gilead Sciences, Inc. (GILD - Analyst Report), Actelion Ltd. (ALIOF - Snapshot Report) and Horizon Pharma plc (HZNP - Snapshot Report). All three are Zacks Rank #1 (Strong Buy) stocks.
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