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Teva Pharmaceutical Q1 revenues down 3 percent

Staff writer ▼ | May 10, 2016
Teva Pharmaceutical Industries reported results for the quarter ended March 31, 2016. Revenues in the first quarter of 2016 amounted to $4.8 billion, down 3% compared to the first quarter of 2015.
Teva
Teva Pharmaceutical   Revenues amounted to $4.8 billion
Excluding the impact of foreign exchange fluctuations, revenues were down 1%.

Exchange rate differences (net of profits from certain hedging transactions) between the first quarter of 2016 and the first quarter of 2015 decreased revenues by $107 million, and both non-GAAP and GAAP operating income by $30 million.

Non-GAAP gross profit was $3.0 billion in the first quarter of 2016, down 2% from the first quarter of 2015.

Non-GAAP gross profit margin was 62.7% in the first quarter of 2016, compared to 61.5% in the first quarter of 2015. GAAP gross profit was $2.8 billion in the first quarter of 2016, down 2% compared to the first quarter of 2015. GAAP gross profit margin was 58.0% in the quarter, compared to 56.9% in the first quarter of 2015.

Research and Development (R&D) expenses (excluding equity compensation expenses and purchase of in-process R&D) in the first quarter of 2016 amounted to $375 million, compared to $328 million in the first quarter of 2015. R&D expenses were 7.8% of revenues in the quarter, compared to 6.6% in the first quarter of 2015. R&D expenses related to our generic medicines segment increased 23% to $136 million, compared to $111 million in the first quarter of 2015.

The increase is mainly due to increased development of complex generic products such as sterile and respiratory medicines. R&D expenses related to our specialty medicines segment increased 7% to $229 million, compared to $215 million in the first quarter of 2015, mainly due to increased development costs related to assets acquired through the Labrys and Auspex transactions.

Selling and Marketing (S&M) expenses (excluding amortization of purchased intangible assets and equity compensation expenses) amounted to $821 million, or 17.1% of revenues, in the first quarter of 2016, compared to $908 million, or 18.2% of revenues, in the first quarter of 2015. S&M expenses related to our generic medicines segment decreased 25% to $279 million, compared to $374 million in the first quarter of 2015.

The decrease was mainly due to reduced royalties related to our sales of budesonide (Pulmicort®) in the United States. S&M expenses related to our specialty medicines segment decreased 6% to $457 million, compared to $486 million in the first quarter of 2015.

General and Administrative (G&A) expenses (excluding equity compensation expenses) amounted to $294 million in the first quarter of 2016, or 6.1% of revenues, compared to $293 million and 5.9% in the first quarter of 2015.

Quarterly non-GAAP operating income was $1.5 billion, similar to the first quarter of 2015. Quarterly GAAP operating income was $1.2 billion in the first quarter of 2016, an increase of 56% compared to $0.7 billion in the first quarter of 2015.

The company calculates EBITDA as non-GAAP operating income (which excludes amortization and certain other items) plus depreciation expenses for the period. In the first quarter of 2016, depreciation amounted to $108 million, compared to $113 million in the first quarter of 2015.

EBITDA for the first quarter of 2016 amounted to $1.6 billion, down 1% compared to the first quarter of 2015.

Non-GAAP financial expenses amounted to $52 million in the first quarter of 2016, compared to $49 million in the first quarter of 2015.

GAAP financial expenses for the first quarter of 2016 amounted to $298 million, compared to $192 million in the first quarter of 2015.

The higher expenses, on a GAAP basis, were mainly the result of a $246 million impairment of net monetary assets following the devaluation in Venezuela.

The provision for non-GAAP income taxes for the first quarter of 2016 amounted to $302 million on pre-tax non-GAAP income of $1.5 billion, for a quarterly tax rate of 21%. The provision for non-GAAP income taxes in the first quarter of 2015 was $312 million on pre-tax non-GAAP income of $1.5 billion, for a quarterly tax rate of 21%.

GAAP income tax expenses for the first quarter of 2016 amounted to $228 million or 26%, on pre-tax income of $867 million.

In the first quarter of 2015, the provision for income taxes amounted to $104 million or 19%, on pre-tax income of $557 million. While the tax rate may fluctuate quarterly, we expect our annual tax rate for 2016 to be similar to that for 2015.

Non-GAAP net income attributable to ordinary shareholders and non-GAAP diluted EPS were $1.2 billion and $1.20, respectively, in the first quarter of 2016, compared to $1.2 billion and $1.36 in the first quarter of 2015. Non-GAAP EPS adjusted to exclude the December 2015 equity offerings was $1.36.

GAAP net income attributable to ordinary shareholders and GAAP diluted EPS were $570 million and $0.62, respectively, in the first quarter of 2016, compared to $446 million and $0.52, respectively, in the first quarter of 2015.

Non-GAAP information: Net non-GAAP adjustments in the first quarter of 2016 amounted to $536 million. â– 


 

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