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What's in Store for West Pharmaceutical (WST) in Q2 Earnings?
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West Pharmaceutical Services (WST - Free Report) is scheduled to release second-quarter 2024 results on Jul 25, before the opening bell. In the last reported quarter, the company delivered an earnings surprise of 20.93%. WST’s earnings beat estimates in each of the trailing four quarters, delivering an average surprise of 12.02%.
Q2 Estimates
Currently, the Zacks Consensus Estimate for revenues is pegged at $738.9 million, indicating a decline of 2% from the year-ago period’s level. The consensus mark for earnings is pinned at $1.78 per share, indicating a decline of 15.6% year over year.
Factors to Note
West Pharmaceutical’s Proprietary Products was an important contributor to its top-line growth during the past few quarters. The segment is likely to have exhibited sustained strength in the second quarter as well, especially on the back of high-value products.
However, destocking, as well as the timing of new high-value product (HVP) device capacity and customer-led HVP upgrade, is likely to have led to a decline in second-quarter sales. Moreover, a weak pharma market and declining sales related to COVID-19 vaccines are expected to have offset growth in other products.
Although Proprietary Products sales are likely to have declined, WST has been witnessing a strong uptake of HVP components, which include Daikyo, NovaPure, and self-injection and administration systems. Moreover, the Biologics market unit demonstrated growth during the first quarter. These trends are projected to have continued in the quarter to be reported.
The company is also expected to have witnessed a gross margin expansion in the aforementioned segment. This was likely due to a favorable mix of products sold (stemming from high-value products’ demand), production efficiencies and higher sales price.
WST’s Contract-Manufactured Products segment might have aided top-line growth due to expanding customer demand for its services during the quarter.
The company’s business is exposed to foreign currency exchange rate fluctuations that are likely to have negatively impacted the company’s second-quarter performance. Meanwhile, the company is investing in capacity expansion, especially to support its HVP products. This is likely to have driven cash burn higher during the soon-to-be-reported quarter.
West Pharmaceutical Services, Inc. Price and Consensus
Our proven model does not conclusively predict an earnings beat for WST this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. This is not the case here, as you will see below.
Earnings ESP: Earnings ESP, which represents the difference between the Most Accurate Estimate and the Zacks Consensus Estimate is 0.00%. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.
Zacks Rank: The company carries a Zacks Rank #4 (Sell) at present.
Stocks Worth a Look
Here are some medical stocks worth considering as these have the right combination of elements to post an earnings beat this reporting cycle.
The company’s shares have surged 25.3% year to date. MCK’s earnings missed estimates in the last reported quarter. McKesson has a four-quarter average earnings surprise of 8.38%.
Inari Medical (NARI - Free Report) has an Earnings ESP of +45.95% and a Zacks Rank of 3 at present.
Its shares have lost 15.4% year to date. NARI’s earnings missed estimates in the last reported quarter. Inari Medical has a trailing four-quarter average earnings surprise of 130.74%.
AxoGen (AXGN - Free Report) has an Earnings ESP of +25.00% and a Zacks Rank of 3 at present.
The stock has risen 33.5% year to date. AXGN’s earnings beat estimates in the last reported quarter. AxoGen has a four-quarter average earnings surprise of 66.46%.
Image: Bigstock
What's in Store for West Pharmaceutical (WST) in Q2 Earnings?
West Pharmaceutical Services (WST - Free Report) is scheduled to release second-quarter 2024 results on Jul 25, before the opening bell. In the last reported quarter, the company delivered an earnings surprise of 20.93%. WST’s earnings beat estimates in each of the trailing four quarters, delivering an average surprise of 12.02%.
Q2 Estimates
Currently, the Zacks Consensus Estimate for revenues is pegged at $738.9 million, indicating a decline of 2% from the year-ago period’s level. The consensus mark for earnings is pinned at $1.78 per share, indicating a decline of 15.6% year over year.
Factors to Note
West Pharmaceutical’s Proprietary Products was an important contributor to its top-line growth during the past few quarters. The segment is likely to have exhibited sustained strength in the second quarter as well, especially on the back of high-value products.
However, destocking, as well as the timing of new high-value product (HVP) device capacity and customer-led HVP upgrade, is likely to have led to a decline in second-quarter sales. Moreover, a weak pharma market and declining sales related to COVID-19 vaccines are expected to have offset growth in other products.
Although Proprietary Products sales are likely to have declined, WST has been witnessing a strong uptake of HVP components, which include Daikyo, NovaPure, and self-injection and administration systems. Moreover, the Biologics market unit demonstrated growth during the first quarter. These trends are projected to have continued in the quarter to be reported.
The company is also expected to have witnessed a gross margin expansion in the aforementioned segment. This was likely due to a favorable mix of products sold (stemming from high-value products’ demand), production efficiencies and higher sales price.
WST’s Contract-Manufactured Products segment might have aided top-line growth due to expanding customer demand for its services during the quarter.
The company’s business is exposed to foreign currency exchange rate fluctuations that are likely to have negatively impacted the company’s second-quarter performance. Meanwhile, the company is investing in capacity expansion, especially to support its HVP products. This is likely to have driven cash burn higher during the soon-to-be-reported quarter.
West Pharmaceutical Services, Inc. Price and Consensus
West Pharmaceutical Services, Inc. price-consensus-chart | West Pharmaceutical Services, Inc. Quote
What the Zacks Model Unveils
Our proven model does not conclusively predict an earnings beat for WST this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. This is not the case here, as you will see below.
Earnings ESP: Earnings ESP, which represents the difference between the Most Accurate Estimate and the Zacks Consensus Estimate is 0.00%. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.
Zacks Rank: The company carries a Zacks Rank #4 (Sell) at present.
Stocks Worth a Look
Here are some medical stocks worth considering as these have the right combination of elements to post an earnings beat this reporting cycle.
McKesson (MCK - Free Report) has an Earnings ESP of +0.19% and a Zacks Rank of 3 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
The company’s shares have surged 25.3% year to date. MCK’s earnings missed estimates in the last reported quarter. McKesson has a four-quarter average earnings surprise of 8.38%.
Inari Medical (NARI - Free Report) has an Earnings ESP of +45.95% and a Zacks Rank of 3 at present.
Its shares have lost 15.4% year to date. NARI’s earnings missed estimates in the last reported quarter. Inari Medical has a trailing four-quarter average earnings surprise of 130.74%.
AxoGen (AXGN - Free Report) has an Earnings ESP of +25.00% and a Zacks Rank of 3 at present.
The stock has risen 33.5% year to date. AXGN’s earnings beat estimates in the last reported quarter. AxoGen has a four-quarter average earnings surprise of 66.46%.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.