) announced that it expects fourth quarter 2013 adjusted earnings
to be slightly above the higher end of its previously guided
range of $2.95 - $3.05 per share. The company's updated guidance
is based on a preliminary review of 2013 results. In the fourth
quarter of 2012, the company had reported adjusted earnings of
$1.59 per share.
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The fourth quarter 2013 earnings include the effect of the Oct
2013 Warner Chilcott acqusition. The Zacks Consensus Estimate
currently stands at $3.02, well below the company's new guidance.
We expect to see significant upward revisions in earnings
estimates for the fourth quarter and full year 2013.
In 2013, Actavis acquired Warner Chilcott, resulting in the
creation of a leading global specialty pharmaceutical company
with combined annual revenues of about $11 billion. Additionally,
revenues were boosted by the inclusion of legacy Actavis
Actavis Pharma continued to witness robust growth driven by new
product launches including the generic versions of Suboxone,
Lidoderm and Cymbalta. Actavis Specialty Brands revenues were
also strong reflecting the completion of the first phase of
Warner Chilcott integration process and restructuring
Higher chain customer sales and third-party brand products drove
the Anda Distribution segment. Overall, we are pleased to see how
well the year turned out to be.
Outlook for 2014
In its third quarter 2013 earnings press release, Actavis had
provided a preliminary outlook for 2014. Actavis expects earnings
of $12.25-$13.00 per share in 2014. The Zacks Consensus Estimate
of $12.92 is towards the higher end of the company's guidance
We believe Actavis Pharma will continue to exhibit impressive
growth rates in 2014 driven by the potential approval and launch
of generic versions of Loestrin 24 (2014), OxyContin (2014),
Exalgo - 32 mg (May 2014) and Intuniv (Dec 2014) among others.
Meanwhile, Actavis has been expanding its branded pharmaceutical
business. With fewer major patent expiries slated to occur in the
next few years, we are encouraged by Actavis' focus on building
its branded and biosimilars pipeline. We view the company's
latest acquisitions (Actavis Group and Warner Chilcott) as
With preliminary results on the table, we believe all eyes will
now be focused on the upcoming Investor Day (Jan 31) and the
release of final fourth quarter and full year 2013 results (Feb
Actavis currently carries a Zacks Rank #2 (Buy). Some
better-ranked stocks include
Impax Laboratories Inc.
). All three carry a Zacks Rank #1 (Strong Buy).