Teva Pharmaceutical Industries Ltd. (TEVA) cratered Thursday after the generic drug maker cut its full-year profit and slashed its dividend 75% owing to weaker U.S. markets and the ongoing political turmoil in Venezuela.
"This is a very tough quarter for Teva," wrote Evercore ISI analyst Umer Raffat in a note. "Business underperforming meaningfully, guidance cut, cash flow guidance cut even more ... and most importantly, dividend cut majorly."
Shares in the world's biggest generic drugmaker closed down about 24%, or $7.50 per share, to $23.75 apiece at the close of trading Thursday, the biggest decline for Teva in nearly 20 years.
For the quarter ending in June 2017, Teva posted a non-GAAP earnings per share of $1.02 per share and booked revenue of $5.7 billion, the company said. Analysts had forecast, on average adjusted EPS of $1.06 on revenue of $5.72 billion, according to Bloomberg.
Peterburg said the firm is focused on "executing meaningful cost reductions, rationalizing our assets and maximizing their value, actively pursuing divestiture opportunities and strengthening our balance sheet."
"Second quarter results were lower than we anticipated due to the performance of our U.S. Generics business and the continued deterioration in Venezuela. These factors also led to a lowering of our outlook for the remainder of the year. All of us at Teva understand the frustration and disappointment of our shareholders in light of these results," said CEO Yitzhak Peterburg.
"In our U.S. Generics business, we experienced accelerated price erosion and decreased volume mainly due to customer consolidation, greater competition as a result of an increase in generic drug approvals by the U.S. FDA, and some new product launches that were either delayed or subjected to more competition," Peterburg added.
Oppenheimer & Co. Inc. analyst Derek Archila on Tuesday downgraded his rating on Teva's shares to perform from outperform and removed his $41 price target. "We no longer see a clear path for TEVA to return to growth in a timely manner and continued pricing pressure in US generics makes us less optimistic its US generic business will meet/exceed Street expectations in the 2H17," Archila wrote in a note.
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This article was originally publish at 8:31 am ET and has been updated.