Teva's Quarter: Earnings Miss, Guidance Cut, Dividend Devastated

Teva Pharmaceutical Industries Ltd (ADR) TEVA's earnings report brought mostly bad news for investors, which resulted in an 18-percent plunge in the stock Thursday morning.

But not all analysts are ready to throw in the towel, as Credit Suisse's Vamil Divan maintains an Outperform rating on Teva with an unchanged $39 price target.

Teva's report consisted of an earnings miss, a reduced guidance and a dividend cut, but there were some positive aspects to the quarter for the Israel-based company, Divan noted. Specifically, the Specialty Medicines business came in better than expected due to Copaxone and Treanda/Bendeka and this won't "attract much attention today."

Needless to say the negatives outweigh the positives, including the absence of any update relating to the vacant CEO and CFO positions, the analyst said. In fact, until these two positions are filled it will be "difficult" for investors to become more constructive on the company's longer-term outlook.

Teva faced notable challenges in the U.S. market where its Generics Medicine business fell short of expectations by $89 million due to greater generic price erosion and lower volumes. If it's of any relief to investors, some of the other negative aspects of the report, including a dividend reduction, were widely expected.

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