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Viatris (VTRS) to Report Q2 Earnings: What's in the Cards?

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Viatris (VTRS - Free Report) , a global healthcare company, is scheduled to report second-quarter results on Aug 8, 2024.

The Zacks Consensus Estimate for revenues is pegged at $3.82 billion, while the same for earnings is pinned at $0.68 per share.

Factors to Consider

Viatris reports results based on markets and geography — Developed Markets, Emerging Markets, Japan, Australia and New Zealand (JANZ) and Greater China.

Growth in Developed Markets, driven by solid performance in Europe, is likely to have boosted the top line. Development in Europe might have been driven by a strong brand portfolio, generics business in Italy and France, and the positive benefit from new product launches. Generic business in North America has likely seen an improvement due to new product launches, including Breyna, as well as strong performance in base business complex products, such as Wixela.

The Zacks Consensus Estimate for revenues from this geography is pinned at $2.4 billion.

Branded businesses (key products such as Lipitor and Elidel) have likely driven the top line in Emerging Markets in the second quarter. The Zacks Consensus Estimate for revenues from this geography is pegged at $606 million.

Sales in JANZ have likely seen an upside, driven by the expansion of business activities in Australia. This must have offset the expected declines due to government price regulations in Japan. The Zacks Consensus Estimate for revenues from the JANZ markets is pinned at $313 million.

Sales in Greater China might have been affected by government-implemented health-care policy regulations in the second quarter. The Zacks Consensus Estimate for revenues from this geography is pegged at $527 million.

Viatris also reports revenues under two divisions (in terms of product category) — brands and generics.

Brand business makes up about majority of the company’s portfolio. As in the previous quarter, strong growth in Emerging Markets and Europe and expansion of business activities in JANZ have most likely been offset by unfavorable channel dynamics in North America and expected base business erosion resulting from government price regulations in Japan and Australia.

Sales from the generics business have likely improved on the back of strong new product launch performance in Developed Markets.

Per management, the gross margin is likely to have increased due to product and segment mix. Operating expenses might have risen during the quarter due to SG&A investments in the eye care franchise, new product launches and progress in key R&D programs.

Recent Updates

Viatris recently closed the divestiture of its over-the-counter business to Cooper Consumer Health. The company previously announced that it has divested its API business in India to Matrix Pharma Private Limited.  Viatris had earlier divested its Women's Healthcare business, primarily related to oral and injectable contraceptives, to Insud Pharma.

Share Price Performance

Viatris’ shares have risen 12% year to date compared to the industry’s gain of 6.6%.

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Image Source: Zacks Investment Research

Earnings Surprise History

The company’s earnings beat estimates in two of the trailing four quarters and missed in the remaining two, delivering an average surprise of 0.15%. In the last reported quarter, VTRS missed on earnings by 1.47%.

What Our Model Predicts   

Our proven model does not conclusively predict an earnings beat for Viatris this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. That is not the case here, as you will see below.

Earnings ESP: VTRS has an Earnings ESP of +1.47% as the Zacks Consensus Estimate is pinned at 68 cents and the Most Accurate Estimate is pegged at 69 cents. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter.

Zacks Rank: The company currently carries a Zacks Rank #4 (Sell). 

Stocks to Consider

Here are some drug/biotech stocks that have the right combination of elements to beat on earnings this time around.

Esperion Therapeutics (ESPR - Free Report) has an Earnings ESP of +35.71% and a Zacks Rank #2 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

ESPR beat on earnings in each of the trailing four quarters, delivering an average surprise of 142.39%. ESPR is scheduled to release second-quarter 2024 results on Aug 12.

Krystal Biotech (KRYS - Free Report) has an Earnings ESP of +34% and a Zacks Rank #3 at present.

KRYS beat on earnings in two of the trailing four quarters and missed in the other two, delivering an average negative surprise of 21.46%. Shares of KRYS have surged 64% year to date.

Exelixis (EXEL - Free Report) has an Earnings ESP of +6.94% and a Zacks Rank #3 at present.

EXEL beat on earnings in two of the trailing four quarters and missed in the other two, delivering an average negative surprise of 8.28%. EXEL is scheduled to release second-quarter 2024 results on Aug 6.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.


 

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