Shares of Teva Pharmaceutical Industries (TEVA) are finding new lows this morning, with a tumble of 20%, on disappointing earnings and a weak outlook.
Owning this stock has been a painful road this year: shares are down 70%. At its 52-week high, the stock was at $42.90. With this morning's dive, it's trading at $11.27.
The Israel-based maker of generic and specialty drugs reported third-quarter earnings per share of $1.00, but analysts were looking for $1.04. To blame: higher selling costs despite lower taxes. Worse, the company slashed fourth-quarter guidance for sales and per-share profits due to competition and price erosion in the U.S. generics business.
Credit Suisse analysts Vamil Divan, Michael V. Morabito, Barbara Kotei and Duaa Mohamed, who have a $14 price target, note Teva reduced expectations for sales from new generic launches in the U.S. to roughly $400 million for the year. From CS:
Negative points of the quarter: Generic sales were lighter than expected, both in the U.S. and outside of the U.S. over-the-counter sales were also ~$60 million light. The gross margin for the quarter was significantly lower than we had forecast (53% vs. Credit Suisse at 56.1%).
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