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Viatris (VTRS) Beats on Q2 Earnings & Sales, Raises View
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Viatris Inc (VTRS - Free Report) reported adjusted earnings of 98 cents per share in the second quarter of 2021, beating the Zacks Consensus Estimate of 88 cents but decreasing from $1.11 reported in the year-ago quarter.
The company was formed in November 2020 through the combination of Mylan and Upjohn. Total revenues came in at $4.58 billion, growing 67.6% year over year as a result of the merger. The top line beat the Zacks Consensus Estimate of $4.4 billion.
Viatris’ stock has lost 24% in the year so far compared with the industry’s decline of 35.2%.
Image Source: Zacks Investment Research
Quarter in Detail
Revenues include sales and other revenues. Sales of $4.56 jumped 69% from the year-ago quarter. Sales were flat compared with combined adjusted results in the year-ago quarter.
The company reports results in four segments — Developed Markets, Emerging Markets, JANZ (Japan, Australia and New Zealand) and Greater China.
Developed market sales came in at $2.6 billion, up 33% from the year-ago quarter.
Sales from Emerging Markets came in at $870 million, jumping 112% year over year.
JANZ generated sales of $501 million, surging 79%.
Sales from Greater China came in at $550.3 million. Sales recorded in the year-ago quarter were $22.7 million.
Brands performed better than expectations, driven by products such as Viagra, Dymista and the Thrombosis portfolio. Complex generics and biosimilars performed in line with expectations, with 40% growth in biosimilars offset by anticipated competition in select Complex Gx products. Generics, which include diversified product forms such as extended-release oral solids, injectables, transdermals and topicals, performed better than management’s expectations, driven primarily by COVID-19 related products.
Viatris generated $224 million in new product revenues (revenues from products launched in 2021) and is on track to record expected figure of $690 million in consolidated new product revenues in 2021.
Adjusted gross margin increased to 58.5% from 54.3% in the year-ago quarter.
Revenues are now projected between $17.5 billion and $17.9 billion, up from the earlier projection of $17.2-$17.8 billion.
During the fourth quarter of 2020, Viatris announced a widespread global restructuring program in order to achieve synergies of $1 billion. The restructuring initiative incorporates and expands on the restructuring program announced by Mylan N.V. earlier in 2020, as part of its business transformation efforts. The company expects to optimize its commercial capabilities and enabling functions, and close, downsize or divest up to 13 manufacturing facilities globally. The company remains on track to realize approximately $500 million of cost synergies this year and to achieve at least $1 billion of cost synergies by 2023.
Dividend Announcement
Viatris declared a quarterly dividend of 11 cents per share payable on Sep 16, 2021. The company paid down $1.15 billion in short-term debt in the first half.
Our Take
Viatris reported better-than-expected results in the second quarter. New products are likely to boost sales in the quarters ahead and the ongoing restructuring program should help the bottom line. The increase in revenue guidance was encouraging.
Image: Bigstock
Viatris (VTRS) Beats on Q2 Earnings & Sales, Raises View
Viatris Inc (VTRS - Free Report) reported adjusted earnings of 98 cents per share in the second quarter of 2021, beating the Zacks Consensus Estimate of 88 cents but decreasing from $1.11 reported in the year-ago quarter.
The company was formed in November 2020 through the combination of Mylan and Upjohn. Total revenues came in at $4.58 billion, growing 67.6% year over year as a result of the merger. The top line beat the Zacks Consensus Estimate of $4.4 billion.
Viatris’ stock has lost 24% in the year so far compared with the industry’s decline of 35.2%.
Image Source: Zacks Investment Research
Quarter in Detail
Revenues include sales and other revenues. Sales of $4.56 jumped 69% from the year-ago quarter. Sales were flat compared with combined adjusted results in the year-ago quarter.
The company reports results in four segments — Developed Markets, Emerging Markets, JANZ (Japan, Australia and New Zealand) and Greater China.
Developed market sales came in at $2.6 billion, up 33% from the year-ago quarter.
Sales from Emerging Markets came in at $870 million, jumping 112% year over year.
JANZ generated sales of $501 million, surging 79%.
Sales from Greater China came in at $550.3 million. Sales recorded in the year-ago quarter were $22.7 million.
Brands performed better than expectations, driven by products such as Viagra, Dymista and the Thrombosis portfolio. Complex generics and biosimilars performed in line with expectations, with 40% growth in biosimilars offset by anticipated competition in select Complex Gx products. Generics, which include diversified product forms such as extended-release oral solids, injectables, transdermals and topicals, performed better than management’s expectations, driven primarily by COVID-19 related products.
Viatris generated $224 million in new product revenues (revenues from products launched in 2021) and is on track to record expected figure of $690 million in consolidated new product revenues in 2021.
Adjusted gross margin increased to 58.5% from 54.3% in the year-ago quarter.
Viatris Inc. Price, Consensus and EPS Surprise
Viatris Inc. price-consensus-eps-surprise-chart | Viatris Inc. Quote
2021 Guidance Update
Revenues are now projected between $17.5 billion and $17.9 billion, up from the earlier projection of $17.2-$17.8 billion.
During the fourth quarter of 2020, Viatris announced a widespread global restructuring program in order to achieve synergies of $1 billion. The restructuring initiative incorporates and expands on the restructuring program announced by Mylan N.V. earlier in 2020, as part of its business transformation efforts. The company expects to optimize its commercial capabilities and enabling functions, and close, downsize or divest up to 13 manufacturing facilities globally. The company remains on track to realize approximately $500 million of cost synergies this year and to achieve at least $1 billion of cost synergies by 2023.
Dividend Announcement
Viatris declared a quarterly dividend of 11 cents per share payable on Sep 16, 2021. The company paid down $1.15 billion in short-term debt in the first half.
Our Take
Viatris reported better-than-expected results in the second quarter. New products are likely to boost sales in the quarters ahead and the ongoing restructuring program should help the bottom line. The increase in revenue guidance was encouraging.
Zacks Rank & Stocks to Consider
Viatris currently carries a Zacks Rank #4 (Sell).
A few better-ranked stocks in the healthcare sector are Horizon , Vertex Pharmaceuticals (VRTX - Free Report) and Repligen, Inc. (RGEN - Free Report) . While Repligen carries a Zacks Rank #2 (Buy), Horizon and Vertex sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Earnings estimates for Horizon for 2021 have moved up 43 cents in the past seven days. The stock is up 44.8% year to date.
Earnings estimates for Vertex for 2021 have moved up 20 cents in the past seven days.
Earnings estimates for Repligen for 2021 have gone up 43 cents in the past 30 days. The stock is up 30.8% year to date.