Teva shares plummet 24% on cheaper generic drug prices, pulling rivals lower
Lower prices for generic drugs, though a boon for consumers, have been challenging drug makers and other companies in the pharmaceutical supply chain—a trend that isn’t expected to go away soon.Generic drug maker Teva Pharmaceutical Industries Ltd. was the latest casualty this earnings season.
Shares plunged 24% in extremely heavy afternoon trade for the NYSE-listed stock after the company TEVA, -24.00% missed profit expectations and reported generics revenue that was below expectations. A full 106.3 million of shares had changed hands by the bell, compared with an average daily volume of 7.8 million.
Teva Pharmaceutical reports big drop in profits, cuts dividend
JERUSALEM, Aug 3 (Reuters) – Israeli drugs group Teva Pharmaceutical Industrial Industries reported a steeper than expected 18.4 percent drop in second-quarter earnings on Thursday, due to weaker prices in the United States, and cut its interim dividend by 75 percent.
Teva, the world’s largest generics drug maker, said it earned $1.02 per share excluding one-off items in the second quarter, down from $1.25 a share in the same period last year. Revenue rose 13 percent to $5.7 billion.
It cut the quarterly dividend payout to $0.085 per ordinary share from $0.34. Teva, which bought Allergan’s generics business for $40.5 billion in August, was expected by analysts to have earned $1.06 per share on revenue of $5.72 billion, according to Thomson Reuters I/B/E/S Estimates.
Teva was left without a permanent chief executive in February after Erez Vigodman stepped down, leaving new management to restore confidence in the world’s biggest generic drug maker after a series of missteps. Its chief financial officer has also said he will step down in the next few months.
Pharma Giant Teva’s Stock Is Imploding As Generic Drugs Get Cheaper
Teva Pharmaceutical Industries Ltd., which has been without a permanent CEO for six months, revealed the full extent of the challenges facing its next leader by announcing more job cuts, a retreat from 45 markets and a steep cut to its dividend after slashing its earnings goals for the second time this year.
The stock slumped the most in almost two decades and the yield on Teva’s bonds jumped after the Israeli drug maker also cautioned that it may breach some debt covenants this year if sales don’t rise. The Petach Tikva, Israel-based company said its profit may fall to as low as $4.30 a share for the year.
The barrage of bad news points to the difficulties in attracting a new chief after Teva ousted Erez Vigodman in early February. Once the darling of the generic-drug industry and a poster-child of Israel’s vibrant corporate scene, Teva has fallen on hard times after cycling through three CEOs in the last five years.
On the Tape Today | 8-4-17
AAOI-Applied Opto holding recent bullish order flow and traded into an inside day. A perfect opportunity to game plan a bullish momentum breakout. Looking for a $98.25 by stop to trigger a new long. Profit target comes in $110. Stop loss on a close below $96.
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Stock Market Sector Performance
Stocks to Trade | 8-4-17 Friday Edition
Bullish Momentum: TTWO, CF, DVAX, AAOI, K, WB, BIDU, EXAS
Bearish Momentum: teva, sbgi, rspp, apa, sm, clvs, dish, mnk, eog, slca
Bullish Order Flow: TTWO, AAOI, BIDU, EA, BABA, UNH, HON, ADBE, LYB, CAT, DE, MAR, BA, SNI, AGN, PNC, FB, MA, NFLX, CCI, CC, VRTX, FSLR
Bearish Order Flow: rspp, apa, hal, apc, slca, nfx, dhr, unp, ibm, hog, stx, ual, hp,
Double Normal Volume: TEVA, PE, COMM, LB, APA, TTWO, CF, ADP, SBGI, RSPP, AMC, K, DISH, ETN, CAH
Inside Days: intc, t, msft, ko, baba, fb, dis, aaoi, v, nflx, nem, hbi, pm, gis, mos, ctrp, amzn, bhge, txn, wy, ma, dhr, crm, momo, lvs, amtd, car
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