Teva Shares Tank On Weak Outlook
Teva continues to struggle.

Struggling drug maker Teva Pharmaceutical Industries Ltd. (TEVA) on Tuesday, Feb. 8,  delivered fourth-quarter results that surpassed analysts' top- and bottom-line expectations, but the company's American depository receipts fell as its outlook came in below estimates.

Teva's ADRs fell 10% to $19.84 on Thursday following the earnings release. Over the last 12 months, Teva shares are down 41%. 

"We expect the stock to be under pressure on lower than expected 2018 sales guidance," wrote Leerink Partners LLC analyst Ami Fadia in a note.

For full-year 2018, Petach Tikva, Israel-based Teva said it expects revenue of $18.3 billion to $18.8 billion and non-GAAP earnings per share of $2.25 to $2.50. Analysts expected, on average, revenue of $19.24 billion and adjusted EPS of $2.93, according to FactSet Research Systems.

For full-year 2017, Teva reported revenue of $22.4 billion and non-GAAP EPS of $4.01.

On the earnings call, Teva president and CEO Kåre Schultz said the company is expecting a significant reduction of revenue compared to 2017 due to factors including the generic drug pricing pressure in the U.S., and its divestiture of businesses such as its women's health assets. Teva also faces erosion of sales of its branded multiple sclerosis drug Copaxone due to generic competition.  

The company reported fourth-quarter non-GAAP EPS of 93 cents, compared with $$1.38 in the same period in 2016. Revenue was down 16% year-over-year to $5.5 billion. Analysts expected adjusted EPS of 77 cents on revenue of $5.29 billion.

"2017 was a challenging year for Teva," Schultz said in the news release. "Starting in 2018 we are focused on meeting our financial obligations and ensuring a much more solid and sustainable business model going forward."

Teva, he added, is "making strong progress on the restructuring plan."

The company said on Dec. 14 it plans to cut 14,000 jobs globally -- or more than a quarter of its staff -- over the next two years as part of restructuring efforts aimed at lowering its total cost base by $3 billion by the end of 2019 from the estimated base of $16.1 billion for 2017.

On Feb. 1, Teva announced amendments to its term loan and revolving credit facilities. The amended leverage ratio covenants in the credit agreements allow a gradual rise in the leverage ratio from 5.0 times to 5.9 times in the third quarter and fourth quarter of 2018, gradually declining to 3.5 times by Dec. 31, 2021.

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