Teva Pharma (TEVA) Issue FY12 Outlook; EPS, Revs to Low-End of Street Expectations

On its conference call today, Teva Pharmaceutical Industries Ltd. (Nasdaq: TEVA) provided its current outlook for non-GAAP financial performance for the full year ending December 31, 2012. This outlook is summarized below.

Total net sales of approximately $22 billion, consisting of total U.S. net sales of $11 billion, total European net sales of $6.6 billion, and total ROW net sales of $4.4 billion. The Street sees sales of $21.97 billion. These figures include the following major business lines:

• Generic product (including API) net sales of approximately $11.8 billion, consisting of U.S. generic sales of $5.0 billion, European generic sales of $4.0 billion, and ROW generic sales of $2.8 billion.
  
• Brand product net sales of approximately $8.2 billion including estimated global net sales of the following products:
  • COPAXONE® of $3.8 billion
    
  • TREANDA® of $550 million
    
  • Women’s Health products of $525 million
    
  • ProAir® HFA of $490 million
    
  • QVAR® of $400 million
    
  • PROVIGIL® of $375 million
    
  • AZILECT® of $350 million
    
  • NUVIGIL® of $300 million
  • OTC net sales of approximately $1 billion
    
  • Other net sales, mostly distribution of third party products, of approximately $1 billion.
• Non-GAAP gross profit margin (which excludes amortization of intangible assets of approximately $1.4 billion) between 58% and 60%.
  
• Net R&D expenses between 6.9% and 7.3% of net sales. This includes clinical support of 30 late stage innovative drug candidate programs. Total R&D, which includes Teva’s JV with Lonza and investment in a variety of smaller companies, will be close to 8% of net sales.
  
• Non-GAAP selling & marketing expenses (which excludes amortization of intangible assets) between 18.4% and 20% of net sales. This includes royalties of approximately $400 million.
  
• General and administrative expenses between 5.1% and 5.5% of net sales.
  
• Non-GAAP net financial expenses of approximately $360 million.
  
• Non-GAAP diluted earnings per share between $5.48 and $5.68, versus the consensus of $5.67.
  
• Estimated fully diluted average number of shares between 865 and 870 million.
  
• Tax provision on our non-GAAP pretax income between 13% and 14%.
  
• Cash flow from operations of $5 billion. Free cash flow (cash flow from operations minus capital expenditures and dividends) of approximately $3 billion.

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