Teva reports record Q4: $567 million sales, $89 million profit

Teva Pharmaceuticals (Nasdaq:TEVA) reported record fourth quarter results. Sales rose to some $567 million, 9% more than for the same period in 2000, while profit before one-time charges rose to $89 million, 66 cents per share, 54% more than for the parallel quarter in 2000. Analysts had expected 5 cents less.

Revenue for 2001 grew to $2.08 billion, 19% more than for 2000. Net profit after some $10 million one-time charges and tax rose to $80 million, 59 cents per share.

In the fourth quarter Teva reported $16 million one-time charges relating to structural changes, including closing and selling manufacturing sites.

Net profit for 2001 after one-time charges grew to about $278 million, some 87% more than the 2000 profit.

Gross profit for the fourth quarter increased to some $239.9 million, 17% more than for the same period in 2000. Gross profit for 2001 grew to about $847.3 million. Gross profit rate for 2001 grew to 40.8%, from 39.5% in 2000. Gross profit rate for the fourth quarter rose to 42.3% due to improved product mix.

Global sales of Copaxone, used for treating relapsing remitting multiple sclerosis, in the fourth quarter grew to about $102 million, 42% more than in the parallel period. Copaxone sales in 2001 rose to some $363 million, 47% more than in 2000. Today Copaxone is approved for sale in 39 countries.

Teva has 58 products awaiting the approval of the U.S. Food and Drug Administration. The FDA has given tentative approval for 13 products. Original product annual sales of the 58 products come to more than $20 billion. Teva is waiting for the approval of 260 products for sale in Europe.

Teva said the board has approved a NIS 55 million cash dividend for the fourth quarter, 43 agorot per share. This is 60% higher than dividends distributed for each of the preceding three quarters.

Shareholders equity as at December 31, 2001 grew to about $1.38 billion, some 20% more than the equity at the end of 2000. The 2001 equity comes to 40% of the balance.

Analyst Haim Israel from investment bank Nessuah Zannex at the beginning of the week estimated that Teva will report some $545 million revenue and $86 million profit for the fourth quarter. Israel told TheMarker that Teva's results are very good, and that it should focus on the top line. He said that Teva increased its sales more than had been expected, despite a relatively slow rate of product approval by the relevant authorities, and despite concern that growth in Copaxone sales could stop.

Referring to the 59 cents EPS after one-time charges, Israel said that profit before these charges ¿ 66 cents per share - is the preferable measure. Israel said that Teva intends to make provisions for its restructuring plan, but it isn't clear exactly when. The analyst said Teva's $273 million cash flow from current operations indicates the company's strength. Israel said that Teva has a high cash-manufacturing rate, evident in a 64% cash flow growth rate.

The 2001 report is the last to be issued under the leadership of President and CEO Eli Hurvitz, who is stepping down this May. Hurvitz will be replaced by COO Israel Makov, who said that the results for 2001 were generated by internal growth, mainly due to launching generic products in the United States, and from stronger Copaxone sales. Teva believes that its pipeline, together with the firm's geographical spread and its cost-efficiency commitment form a solid foundation for future growth, Makov said.

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