Teva Pharmaceutical Clocks Lower Profits On Flat Q1 Sales, Sticks To Annual Guidance

• Teva Pharmaceutical Industries Ltd's TEVA Q1 sales reached $3.66 billion, flat Y/Y, slightly beating the consensus of $3.63 billion. In local currency terms, revenues increased by 4%.
• The adjusted gross profit margin was 49.1% in Q1, compared to 54.2% a year ago, mainly driven by rising costs due to inflationary and other macroeconomic pressures, an increase in revenues with lower profitability from Anda in the North America segment, lower revenues from Copaxone and Bendeka and Treanda, and an unfavorable impact of hedging activities.
• Adjusted operating margin reached 21.4% from 27.7% a year ago.
• Adjusted EBITDA declined 21% to $899 million.
• "While we are seeing some positive tailwinds, we are also taking decisive actions to address some headwinds, mainly through improved portfolio mix driven by our innovative products and supply chain enhancements," said CEO Richard Francis. "We expect these actions will improve our gross profit margin in the coming quarters."
• Adjusted EPS of $0.40 came below the Wall Street estimate of $0.56, down from $0.55 a year ago.
• Outlook: Teva anticipates FY23 sales of $14.8 – $15.4 billion, compared to the consensus of $15.06 billion. The company anticipates adjusted EPS of $2.25-$2.55 versus the consensus of $2.40.
• The company anticipates FY23 adjusted EBITDA of $4.5 - $4.9 billion and free cash flow of $1.7 - $2.1 billion.
• Teva plans to unveil a new strategy next week, which Francis said would "build on Teva's strong foundations, key strengths, and set the stage for long-term growth."
• Price Action: TEVA shares are down 6.04% at $8.55 during the premarket session on the last check Wednesday.

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