Why Vivus (VVUS) Is Down Today

NEW YORK (TheStreet) -- Vivus  (VVUS) was falling 13.26% to $5.86 on Tuesday morning despite the pharmaceutical company's earnings beating expectations.

The company reported a net loss of 17 cents a share for the fourth-quarter, narrower than the Zacks consensus estimate of 43 cents and the year-ago loss of 56 cents. Revenue for the fourth quarter increased year-over-year to $44.1 million from $2 million; however, these earnings included a one-time licensing payment of about $34.8 million, or about 34 cents a share, from its erectile dysfunction drug.

Vivus beat expectations, but only did so because of the licensing payment. Analysts expected a loss of 40 cents a share and the company would have posted a loss of approximately 51 cents a share were it not for the payment.

The company also announced that its anti-obesity drug Qsymia totaled approximately 124,000 for total sales of $7.7 million for the quarter, a 14% sequential increase. Despite this, both JP Morgan  (JPM) and JMP Securities noted they do not see Qsymia gaining traction anytime soon. JP Morgan downgraded the company to "hold" from "buy," while JMP Securities reiterated its "market perform" rating.

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TheStreet Ratings team rates VIVUS INC as a "sell" with a ratings score of D. TheStreet Ratings Team has this to say about their recommendation:

"We rate VIVUS INC (VVUS) a SELL. This is driven by a few notable weaknesses, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. The company's weaknesses can be seen in multiple areas, such as its feeble growth in its earnings per share, deteriorating net income, disappointing return on equity, generally disappointing historical performance in the stock itself and generally high debt management risk."

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