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Viatris (VTRS) Q2 Earnings Outpace Estimates, Sales Miss
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Viatris Inc. (VTRS - Free Report) delivered second-quarter 2024 adjusted earnings of 69 cents per share, which beat the Zacks Consensus Estimate by a penny. The company recorded adjusted earnings of 75 cents per share in the year-ago quarter.
Total revenues came in at $3.79 billion, down 3.1% year over year on a divestiture-adjusted operational basis. Revenues include product sales and other revenues. The top line missed the Zacks Consensus Estimate of $3.81 million.
The stock is trading up in response to the second-quarter results, mainly due to the earnings beat. VTRS’ shares have risen 4.9% year to date compared with the industry’s 1.9% growth.
Image Source: Zacks Investment Research
All growth rates mentioned below are on a year-over-year basis and adjusted for the impact of proportionate results from the divestitures that closed in 2023 and 2024.
Quarter in Detail
Sales totaled $3.78 million, up 2%. The company reports results under four segments — Developed Markets, Emerging Markets, Japan, Australia and New Zealand (JANZ) and Greater China.
Sales from Developed Markets amounted to $2.3 billion, up 1% from the year-ago quarter’s level. The top line missed the Zacks Consensus Estimate of $2.38 billion.
Sales from Emerging Markets came in at $578.1 million, up 7% but missed the Zacks Consensus Estimate of $606 million.
JANZ generated sales of $349.6 million, up 1%. Sales beat the Zacks Consensus Estimate of $313 million.
Sales from Greater China totaled $539 million, up 5% and beat the Zacks Consensus Estimate of $527 million.
Based on product category, revenues from Brands increased 2% to $2.4 billion. Sales from this category reflected strong growth in Greater China and the expansion of the company’s portfolio in Emerging Markets and JANZ, offset by unfavorable channel dynamics in North America and the adverse impact of government price regulations in Japan and Australia.
Among Brands, Lipitor’s sales totaled $348.4 million, down from $380 million in the year-ago quarter. Norvasc sales decreased 11% to $161.9 million.
Yupelri sales came in at $54.5 million, down from $55 million generated in the year-ago quarter.
Generics, which includes diversified product forms such as extended-release oral solids, injectables, transdermals, and topicals and complex generics, posted revenues of $1.4 billion, up 2%. The growth in sales was driven by strong new product launch performance in Developed Markets, continued growth from complex products and solid performance across broader European portfolio.
Viatris generated $210 million in new generic product revenues, primarily driven by Breyna (generic for Symbicort), lisdexamfetamine and other new products globally.
Based on strong performance in the first half, VTRS raised its projection to the range of $500-$600 million in new product revenues for 2024 (previous guidance: $450-$550 million).
Adjusted gross margin came in at 58%, down from 59.5% in the year-ago quarter.
Total revenues are now projected to be in the band of $14.6-$15.1 billion versus the previous guidance of $14.98-$15.48 billion (provided in February 2024).
The guidance was adjusted to reflect the impact of divestitures.
With respect to the impact of divestitures, VTRS completed all divestitures with the closing of its over-the-counter business to Cooper Consumer Health. Adjusted earnings per share are now expected to be in the range of $2.58-$2.73 for 2024 (earlier estimate: $2.66-$2.81).
Our Take
The second-quarter results were a mixed bag. New products are performing well and the increase in annual guidance for these product sales is encouraging.
With the substantial completion of its divestitures, VTRS has increased its financial strength and is looking to accelerate growth and shareholder return.
In the past 60 days, estimates for Entrada Therapeutics’ 2024 loss per share have narrowed from 14 cents to 13 cents, and the same for 2025 have narrowed from $3.44 to $3.21.
In the past 60 days, the Zacks Consensus Estimate for Anixa Biosciences’ 2024 loss per share has narrowed from 44 cents to 43 cents. During the same time frame, the estimate for Anixa Biosciences’ 2025 loss per share has remained constant at 45 cents.
ANIX’s earnings beat estimates in three of the trailing four quarters and missed the mark once, delivering an average surprise of 2.27%.
In the past 60 days, estimates for Akero Therapeutics’ 2024 loss per share have narrowed from $3.87 to $3.82. During the same period, loss per share estimates for 2025 have remained constant at $4.29.
Akero’s earnings beat estimates in one of the trailing four quarters, missed twice and met in the other, delivering an average negative surprise of 5.10%.
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Viatris (VTRS) Q2 Earnings Outpace Estimates, Sales Miss
Viatris Inc. (VTRS - Free Report) delivered second-quarter 2024 adjusted earnings of 69 cents per share, which beat the Zacks Consensus Estimate by a penny. The company recorded adjusted earnings of 75 cents per share in the year-ago quarter.
Total revenues came in at $3.79 billion, down 3.1% year over year on a divestiture-adjusted operational basis. Revenues include product sales and other revenues. The top line missed the Zacks Consensus Estimate of $3.81 million.
The stock is trading up in response to the second-quarter results, mainly due to the earnings beat. VTRS’ shares have risen 4.9% year to date compared with the industry’s 1.9% growth.
Image Source: Zacks Investment Research
All growth rates mentioned below are on a year-over-year basis and adjusted for the impact of proportionate results from the divestitures that closed in 2023 and 2024.
Quarter in Detail
Sales totaled $3.78 million, up 2%. The company reports results under four segments — Developed Markets, Emerging Markets, Japan, Australia and New Zealand (JANZ) and Greater China.
Sales from Developed Markets amounted to $2.3 billion, up 1% from the year-ago quarter’s level. The top line missed the Zacks Consensus Estimate of $2.38 billion.
Sales from Emerging Markets came in at $578.1 million, up 7% but missed the Zacks Consensus Estimate of $606 million.
JANZ generated sales of $349.6 million, up 1%. Sales beat the Zacks Consensus Estimate of $313 million.
Sales from Greater China totaled $539 million, up 5% and beat the Zacks Consensus Estimate of $527 million.
Based on product category, revenues from Brands increased 2% to $2.4 billion. Sales from this category reflected strong growth in Greater China and the expansion of the company’s portfolio in Emerging Markets and JANZ, offset by unfavorable channel dynamics in North America and the adverse impact of government price regulations in Japan and Australia.
Among Brands, Lipitor’s sales totaled $348.4 million, down from $380 million in the year-ago quarter. Norvasc sales decreased 11% to $161.9 million.
Yupelri sales came in at $54.5 million, down from $55 million generated in the year-ago quarter.
Generics, which includes diversified product forms such as extended-release oral solids, injectables, transdermals, and topicals and complex generics, posted revenues of $1.4 billion, up 2%. The growth in sales was driven by strong new product launch performance in Developed Markets, continued growth from complex products and solid performance across broader European portfolio.
Viatris generated $210 million in new generic product revenues, primarily driven by Breyna (generic for Symbicort), lisdexamfetamine and other new products globally.
Based on strong performance in the first half, VTRS raised its projection to the range of $500-$600 million in new product revenues for 2024 (previous guidance: $450-$550 million).
Adjusted gross margin came in at 58%, down from 59.5% in the year-ago quarter.
Viatris Inc. Price, Consensus and EPS Surprise
Viatris Inc. price-consensus-eps-surprise-chart | Viatris Inc. Quote
2024 Guidance Updated
Total revenues are now projected to be in the band of $14.6-$15.1 billion versus the previous guidance of $14.98-$15.48 billion (provided in February 2024).
The guidance was adjusted to reflect the impact of divestitures.
With respect to the impact of divestitures, VTRS completed all divestitures with the closing of its over-the-counter business to Cooper Consumer Health.
Adjusted earnings per share are now expected to be in the range of $2.58-$2.73 for 2024 (earlier estimate: $2.66-$2.81).
Our Take
The second-quarter results were a mixed bag. New products are performing well and the increase in annual guidance for these product sales is encouraging.
With the substantial completion of its divestitures, VTRS has increased its financial strength and is looking to accelerate growth and shareholder return.
Zacks Rank and Stocks to Consider
Viatris currently carries a Zacks Rank #4 (Sell).
Some better-ranked stocks in the healthcare sector are Entrada Therapeutics (TRDA - Free Report) , Anixa Biosciences (ANIX - Free Report) and Akero Therapeutics (AKRO - Free Report) . While TRDA sports a Zacks Rank #1 (Strong Buy), ANIX and AKRO carry a Zacks Rank #2 (Buy) each at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
In the past 60 days, estimates for Entrada Therapeutics’ 2024 loss per share have narrowed from 14 cents to 13 cents, and the same for 2025 have narrowed from $3.44 to $3.21.
In the past 60 days, the Zacks Consensus Estimate for Anixa Biosciences’ 2024 loss per share has narrowed from 44 cents to 43 cents. During the same time frame, the estimate for Anixa Biosciences’ 2025 loss per share has remained constant at 45 cents.
ANIX’s earnings beat estimates in three of the trailing four quarters and missed the mark once, delivering an average surprise of 2.27%.
In the past 60 days, estimates for Akero Therapeutics’ 2024 loss per share have narrowed from $3.87 to $3.82. During the same period, loss per share estimates for 2025 have remained constant at $4.29.
Akero’s earnings beat estimates in one of the trailing four quarters, missed twice and met in the other, delivering an average negative surprise of 5.10%.