Daily Local News (West Chester, PA)
West falls short of Wall Street forecasts
Margins did not meet expectations, CEO Eric Green said of second-quarter earnings
UWCHLAN » West Pharmaceutical Services Inc. (WST) reported second-quarter net income of $38.8 million.
On a per-share basis, the medical device company said it had a profit of 51 cents.
The results did not meet Wall Street expectations. The average estimate of four analysts surveyed by Zacks Investment Research was for earnings of 65 cents per share.
West posted revenue of $397.6 million in the period, also missing Street forecasts. Three analysts surveyed by Zacks expected $405.3 million, the Associated Press reported.
West Pharmaceutical expects full-year earnings in the range of $2.66 to $2.73 per share, with revenue in the range of $1.59 billion to $1.6 billion.
West Pharmaceutical shares have risen 9 percent since the beginning of the year. The stock has climbed 19 percent in the last 12 months.
In a statement following release of the earnings, President and CEO Eric M. Green indicated the results were disappointing.
“Following a strong start to the year, we generated approximately 4 percent organic sales growth in the second-quarter,” he said.
“However, due to an unfavorable sales mix in the quarter, our margins did not meet our expectations.”
“Strong contract-manufactured products sales growth and solid performance of the pharma market unit did not offset the softness in the generics market unit and, to a lesser extent, biologics market unit, which were impacted by customer inventory management and delays in several new drug launches,” Green said. “In addition,
our generics unit experienced lower volumes from select customers that have had their production impacted by regulatory issues.”
The CEO said the company, based in the Eagleview Corporate Center, predicted West will meet its full-year updated guidance.
“We see no fundamental change in the markets we serve,” he said. “We have confidence in our strategy and our long-term view of West’s ability to grow organic sales 6-to-8 percent per year with expanding margins for the next several years.”
Green added the company
is encouraged by the potential of the bologics market.
“We continue to invest in our business to fuel our long-term growth potential and are managing our costs,” he said in the statement released Thursday. “Based on market dynamics and customer order patterns, we expect sales performance to continue to build over the balance of the year, with normal seasonality trends for the third and fourth quarters.”