
Teva Reduces 2012 Profit Forecasts
Teva Pharmaceuticals yesterday announced that they have reduced their sales and earnings predictions for 2012 partly as a result of pricing problems and currency effects in Europe.
The organisation is now forecasting earnings in the range of $5.30-$5.40 per share, down from prior guidance of $5.48-$5.68. Turnover is expected to reach $20-$21 billion, down from a preceding prediction of $22 billion. Analysts are anticipating earnings of $5.58 per share on revenue of roughly $21.3 billion.
Teva Pharmaceutical’s revenues should comprise of $10.5 billion from the USA in sales, $5.8 billion in Europe and $4.2 billion in the remainder of the world. Sales of generic drugs are expected to reach $10.7 billion, while for branded drugs, Copaxone (glatiramer acetate), a multiple sclerosis drug, is expected to contribute $3.8 billion; and Azilect (rasagiline) for Parkinson’s disease could hit $580 million.
New CEO Jeremy Levin, who recently took over from Shlomo Yanai, observed that the company’s performance in Europe has been impacted by over $1 billion. This is caused by negative currency effects of $600 million, “and the on-going macroeconomic conditions and healthcare reforms in key European markets will have an estimated impact of $400 million.”
Dr Levin also spoke about the significance of improving market share in the US generics sector and hinted at possible divestitures, adding that “if there are businesses that don’t fit, we will look to divest them.” Teva have also introduced a cost-cutting and efficiency programme across all of their operations.
Remarking on the news, Wells Fargo analyst Michael Tong commented that “though management revised guidance lower and highlighted on-going challenges, we think investors will likely be relieved that the revised guidance addresses challenges.”
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