As revenue declines and the business shrinks, Endo should be collecting receivables and selling down inventory to generate cash flow.
Endo pharma earnings full#
For full year 2017 Endo generated $534 million in cash flow from operations, up from $528 million in the year earlier period. As long as it does not run out of money ENDP bulls will likely keep speculating in the stock.
I believe Endo's cash flow is most important for now. Debt holders may not have an incentive to see the company go belly up they may be willing to extend debt maturities when they come due. At these levels the debt is practically untenable. Its $8.2 billion debt load is at 7.5x run-rate EBITDA. Nonetheless, Endo remains highly-indebted. Q4 2017 SG&A expenses fell 33% Y/Y, yet R&D costs rose slightly. I found this remarkable.Įndo has been cutting costs to the bone also. Endo was able to maintain acceptable margins despite a 38% decline in total revenue, and a diminution in pricing for the Generics segment. The company's Q4 2017 EBITDA margin was 30%, down from 38% in the year earlier period. Endo's management team has done a masterful job of cutting costs and maintaining an acceptable level of operating margins.
Endo pharma earnings free#
I would have expected a free fall in revenue to lead to huge operating losses. If Endo can accelerate the new drugs it brings to market then it could help offset the slide in North America. The diminution in generics prices in North America could be intractable for now. Generics fell 37%, while new drug launches were down 67%. Large clients are demanding price cuts while the FDA is accelerating drug approval which is increasing competition. However, the North America Generics market is currently in a state of disarray. One would suspect that Generics (64% of total revenue) could potentially buoy the company until the Branded segment gets sorted out.
The other problem is that Endo does not seem to have a moat. We should learn more from management this quarter whether the free fall in Branded segment has run its course. Last year, the FDA asked Endo to remove the opioid Opana from the market due to its public health consequences of abuse. Opioid prescriptions were 219 million in 2011 - nearly triple the number reported 20 years earlier despite the fact the level of pain felt by Americans may not have increased proportionately. The Branded segment houses Endo's pain-related drugs like Opana, Percocet, Voltaren and Lidoderm. The company's association with opioid sales is well-known. The biggest decline came from Generics (down 43%) the Branded segment experienced a 21% decline, while International was off 41%. Both have hurt Endo's top line, which is in free fall.Įndo's Q4 2017 revenue fell 38% Y/Y. The FDA and lawmakers have made concerted efforts to help tamp down rising drug prices as well as runaway opioid prescriptions. The company has gotten lumped in with price-gougers like Valeant ( VRX) and Turing Pharmaceuticals who acquire brands and raise prices post-deal. There is a war being fought over rising drug prices and Endo Pharmaceuticals ( ENDP) is in the middle of it. Investors should focus on the following key items: Diminution In Generics The revenue estimate implies a 30% decline Y/Y. Analysts expect revenue of $691.83 million and eps of $0.55. This story was generated by Automated Insights () using data from Zacks Investment Research.Endo Pharmaceuticals ( ENDP) reports quarterly earnings May 8th.
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The stock has risen 43% in the last 12 months. The company said it expects revenue in the range of $620 million to $680 million for the fiscal first quarter.Įndo expects full-year earnings in the range of $1.80 to $2.30 per share, with revenue ranging from $2.55 billion to $2.79 billion.Įndo shares have increased 30% since the beginning of the year. Revenue was reported as $2.9 billion.įor the current quarter ending in April, Endo expects its per-share earnings to range from 40 cents to 50 cents. Six analysts surveyed by Zacks expected $653.8 million.įor the year, the company reported net income of $183.9 million, or 79 cents per share, swinging to a profit in the period. The health care company posted revenue of $760.2 million in the period, which also topped Street forecasts. The average estimate of seven analysts surveyed by Zacks Investment Research was for earnings of 50 cents per share. The results topped Wall Street expectations.
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