Taro Pharma (TARO) Misses Q1 EPS by 62c, Revenues Miss

Taro Pharma (NYSE: TARO) reported Q1 EPS of $1.71, $0.62 worse than the analyst estimate of $2.33. Revenue for the quarter came in at $154.6 million versus the consensus estimate of $179.54 million.

• Net sales of $154.6 million, decreased $6.7 million, or 4.2%, the result of continuing increased competition and the challenging pricing environment; despite an overall increase in volumes of 11.1%.
• Gross profit of $100.1 million, decreased $16.5 million and as a percentage of net sales, was 64.7% compared to 72.2%.
• Research and development expenses of $13.3 million decreased $1.3 million.
• Selling, marketing, general and administrative expenses of $23.6 million decreased $0.7 million.
• Operating income of $63.2 million decreased $14.5 million and as a percentage of net sales was 40.8% as compared to 48.1%.
• Interest and other financial income increased $3.3 million to $7.8 million.
• Foreign Exchange (FX) income of $10.0 million compared to FX expense of $19.6 million ─ a favorable impact of $29.6 million, principally the result of the weakening of the Canadian dollar vs. the U.S. dollar.
• Tax expense of $14.1 million increased $4.1 million with the effective tax rate increasing to 17.3% from 15.5%.
• Net income attributable to Taro was $67.3 million compared to $54.5 million, resulting in diluted earnings per share of $1.71 compared to $1.35.

Mr. Uday Baldota, Taro’s CEO stated, “We continue to face an overall market trend, particularly in the U.S., that is not dramatically changing, and depending on the product(s), price deflation continues to be a challenge. We continue to maintain a development pipeline investing only in those products which are viable. From a business development perspective, we will continue to evaluate opportunities that make strategic sense and remain disciplined in our approach.”

For earnings history and earnings-related data on Taro Pharma (TARO) click here.

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