Teva Pharmaceutical Industries Ltd.'s (TEVA) American depositary receipts surged in early trading on Thursday, Nov. 1, after the drugmaker unveiled third-quarter adjusted earnings that surpassed analysts' estimates and raised its guidance.
Petah Tikva, Israel-based Teva reported non-GAAP diluted earnings per share of 68 cents, compared with $1 a year ago. The company had revenue of $4.53 billion, down 19% year over year, or 18% in local currency terms. Teva attributed the drop primarily to generic competition to multiple sclerosis drug Copaxone, price erosion in the U.S. generics business and loss of revenue after the divestiture of some products and discontinuation of certain activities.
Analysts had forecast EPS of 54 cents on revenue of $4.55 billion, according to FactSet Research Systems Inc.
Teva's ADRs jumped 6.7% to $21.31 in early trading.
"North America Copaxone revenues were very strong at $463M (+$97M above our estimate), although this was offset by lower-than-expected generics revenue across all three geographic regions," Leerink Partners LLC analyst Ami Fadia wrote in a note.
The higher-than-expected EPS "was driven by lower [research and development] (-$33M vs consensus), [selling, general and administrative expenses] (-$62M vs consensus) and tax rate (-5.5% vs our estimate)," Fadia added.
Teva increased its full-year non-GAAP EPS outlook to $2.80 to $2.95, compared with the previous guidance of $2.55 to $2.80. It raised its free cash flow guidance to $3.6 billion to $3.8 billion fron the prior projection of $3.2 billion to $3.4 billion.
In December, Teva unveiled a restructuring plan, which included cutting 14,000 jobs globally over the next two years, aimed at lowering its total cost base by $3 billion by the end of 2019 from $16.1 billion in 2017.
On Thursday, Teva president and CEO Kåre Schultz said the company is on pace to meet its cost reduction goal. In the first nine months of 2018, the company's restructuring plan generated $1.8 billion of cost reductions, Schultz said.
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