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Why Is Endo (ENDP) Down 4.7% Since the Last Earnings Report?

A month has gone by since the last earnings report for Endo International PLCENDP . Shares have lost about 4.7% in that time frame, underperforming the market.

Will the recent negative trend continue leading up to the stock's next earnings release, or is it due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.

Endo Beats on Q1 Earnings, Reaffirms '17 Guidance

Endo's first-quarter 2017 earnings from continuing operations was $1.23 per share which topped the Zacks Consensus Estimate of $1.12. Earnings were also above the year-ago figure of $1.08.

Revenues came in at $1.03 billion in first-quarter of 2017, up 8% year over year, in line with the Zacks Consensus Estimate.

Quarterly Highlights

The company reports results through three segments - Branded Pharmaceuticals (U.S.), Generic Pharmaceuticals (U.S.) and International Pharmaceuticals.

U.S. Branded Pharmaceuticals sales were down 19% to $250 million, reflecting generic entry for Voltaren Gel, Frova, Opana ER and Lidoderm, and divestiture of Stendra. Voltaren Gel sales were down 60% year over year to approximately $14.3 million. Sales of pain products Lidoderm and Opana ER were down 33% and 20%, respectively. However, Xiaflex sales increased 12% year over year reflecting double-digit demand growth for the product.

U.S. Generic Pharmaceuticals recorded sales of $722 million in the quarter, up 24% from the year-ago period owing to the launches of the generic version of Seroquel XR and Zetia. Segment revenues also benefited from the robust performance of sterile injectables. However, generics base business revenues declined approximately 32% due to increased competition and previously announced product discontinuances.

The International Pharmaceuticals division garnered sales of $65 million, down 8% year over year. Endo's previously announced divestiture of its South African subsidiary, Litha Healthcare Group to Acino Pharma (AG) is expected to close in the second quarter of 2017, subject to customary conditions. The company also announced that due diligence had begun on the potential divestiture of its Mexican subsidiary, Somar, which is in progress.

2017 Outlook

Endo reiterated its guidance for revenues and earnings per share for 2017. It expects revenues in the range of $3.45 billion to $3.60 billion. Also, the company projects continuing operations to be in the range of $3.45 to $3.75 per share.

How Have Estimates Been Moving Since Then?

Analysts were quiet during the last one month period as none of them issued any earnings estimate revisions.

Endo International PLC Price and Consensus

Endo International PLC Price and Consensus | Endo International PLC Quote

VGM Scores

At this time, Endo's stock has an average Growth Score of 'C', though it is lagging a bit on the momentum front with a 'D'. However, the stock was allocated a grade of 'B' on the value side, putting it in the top 40% for this investment strategy.

Overall, the stock has an aggregate VGM Score of 'C'. If you aren't focused on one strategy, this score is the one you should be interested in.

Our style scores indicate that the stock is more suitable for value investors than growth investors.

Outlook

The stock has a Zacks Rank #3 (Hold). We are expecting an inline return from the stock in the next few months.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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