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Why Is Emergent Biosolutions (EBS) Up 8% Since Its Last Earnings Report?
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It has been about a month since the last earnings report for Emergent Biosolutions Inc. (EBS - Free Report) . Shares have added about 8% in that time frame.
Will the recent positive trend continue leading up to its next earnings release, or is EBS due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Emergent Q4 Earnings Beat, Revenues Increased Y/Y
Emergent BioSolutions reported earnings of 74 cents per share in the fourth quarter of 2017, which beat the Zacks Consensus Estimate of 69 cents. However, the bottom line was in line with the year-ago figure.
Revenues in the reported quarter climbed 28% from the year-ago period to $193.8 million, primarily on the back of substantially higher product sales. This was however, partially offset by lower contracts and grants revenues. The top line also surpassed the consensus mark of $191 million.
Quarter in Detail
Total product sales soared 85% to $161.6 million from the year-earlier quarter, mainly owing to increase in sales of BioThrax, under the company’s current contract with the Centers for Disease Control and Prevention for procurement of the same. Moreover, initial sales of raxibacumab (anthrax monoclonal antibody) and ACAM2000 (smallpox vaccine), acquired from GlaxoSmithkline and Sanofi respectively, last year, also contributed to higher sales.
Contracts, grants and collaboration revenues plunged 66% year over year to $15.9 million, primarily due to decrease in revenues following completion of multiple contracts with the U.S. government as well as reduction in the R&D activities, related to certain ongoing funded development programs.
Contract manufacturing revenues were $16.2 million, slightly slipping 3% compared with the prior-year number.
Research and development expenses were $28.5 million, up 5% from the comparable quarter last year. This rise is attributable to higher contract development services performed for next-generation anthrax vaccine, NuThrax and broad-spectrum antibiotic, EV-035.
Selling, general and administrative expenses also increased 19% to $42 million due to higher compensation expense and professional services fees.
2017 Results
Full-year sales grew 14.8% year over year to $560.9 million, beating the Zacks Consensus Estimate of $557.4 million. The top line also met the preliminary results, announced last month.
The full-year earnings of $1.90 per share outpaced the Zacks Consensus Estimate of $1.85. Moreover, the bottom line is higher than $1.57 a year ago.
2018 Outlook
Emergent maintained its previously issued revenue guidance in the range of $715-$755 million in 2018. The midpoint of $735 million in the guided range reflects a 31% surge over 2017 revenues of $560.9 million. However, the company lowered its first-quarter of 2018 revenue guidance in the band of $125-$150 million from the previous expectation of $145-$160 million on expectation of an unfavorable timing of deliveries of BioThrax.
The company anticipates adjusted net income between $110 million and $125 million. The midpoint of $117.5 million in the former forecast represents an improvement of 23% year over year.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in fresh estimates. There has been one revision higher for the current quarter.
At this time, EBS has an average Growth Score of C. Its Momentum is doing a bit better with a B. The stock was also allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Based on our scores, the stock is more suitable for momentum investors than those looking for value and growth.
Outlook
Estimates have been trending upward for the stock and the magnitude of this revision indicates a downward shift. Interestingly, EBS has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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Why Is Emergent Biosolutions (EBS) Up 8% Since Its Last Earnings Report?
It has been about a month since the last earnings report for Emergent Biosolutions Inc. (EBS - Free Report) . Shares have added about 8% in that time frame.
Will the recent positive trend continue leading up to its next earnings release, or is EBS due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Emergent Q4 Earnings Beat, Revenues Increased Y/Y
Emergent BioSolutions reported earnings of 74 cents per share in the fourth quarter of 2017, which beat the Zacks Consensus Estimate of 69 cents. However, the bottom line was in line with the year-ago figure.
Revenues in the reported quarter climbed 28% from the year-ago period to $193.8 million, primarily on the back of substantially higher product sales. This was however, partially offset by lower contracts and grants revenues. The top line also surpassed the consensus mark of $191 million.
Quarter in Detail
Total product sales soared 85% to $161.6 million from the year-earlier quarter, mainly owing to increase in sales of BioThrax, under the company’s current contract with the Centers for Disease Control and Prevention for procurement of the same. Moreover, initial sales of raxibacumab (anthrax monoclonal antibody) and ACAM2000 (smallpox vaccine), acquired from GlaxoSmithkline and Sanofi respectively, last year, also contributed to higher sales.
Contracts, grants and collaboration revenues plunged 66% year over year to $15.9 million, primarily due to decrease in revenues following completion of multiple contracts with the U.S. government as well as reduction in the R&D activities, related to certain ongoing funded development programs.
Contract manufacturing revenues were $16.2 million, slightly slipping 3% compared with the prior-year number.
Research and development expenses were $28.5 million, up 5% from the comparable quarter last year. This rise is attributable to higher contract development services performed for next-generation anthrax vaccine, NuThrax and broad-spectrum antibiotic, EV-035.
Selling, general and administrative expenses also increased 19% to $42 million due to higher compensation expense and professional services fees.
2017 Results
Full-year sales grew 14.8% year over year to $560.9 million, beating the Zacks Consensus Estimate of $557.4 million. The top line also met the preliminary results, announced last month.
The full-year earnings of $1.90 per share outpaced the Zacks Consensus Estimate of $1.85. Moreover, the bottom line is higher than $1.57 a year ago.
2018 Outlook
Emergent maintained its previously issued revenue guidance in the range of $715-$755 million in 2018. The midpoint of $735 million in the guided range reflects a 31% surge over 2017 revenues of $560.9 million. However, the company lowered its first-quarter of 2018 revenue guidance in the band of $125-$150 million from the previous expectation of $145-$160 million on expectation of an unfavorable timing of deliveries of BioThrax.
The company anticipates adjusted net income between $110 million and $125 million. The midpoint of $117.5 million in the former forecast represents an improvement of 23% year over year.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in fresh estimates. There has been one revision higher for the current quarter.
Emergent Biosolutions Inc. Price and Consensus
Emergent Biosolutions Inc. Price and Consensus | Emergent Biosolutions Inc. Quote
VGM Scores
At this time, EBS has an average Growth Score of C. Its Momentum is doing a bit better with a B. The stock was also allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Based on our scores, the stock is more suitable for momentum investors than those looking for value and growth.
Outlook
Estimates have been trending upward for the stock and the magnitude of this revision indicates a downward shift. Interestingly, EBS has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.