Zacks
0
All posts from Zacks
Zacks in Our Research. Your Success.,

Dr. Reddy's (RDY) Earnings Decline Y/Y in Q1, Sales Rise

Dr. Reddy's Laboratories Ltd. RDY reported first-quarter fiscal 2018 earnings per American Depositary Share (ADS) of 6 cents, down from 12 cents in the year-ago quarter.

Revenues increased 2.4% year over year to $513 million.

Notably, the company’s share price declined 18.8% year to date against the Zacks classified industry’s gain of 0.4%.

Quarter in Detail

Dr. Reddy’s reported revenues under three segments – Global Generics, Pharmaceutical Services & Active Ingredients (PSAI), and Proprietary Products and Others.

Global Generics revenues rose 3.2% year over year to $425 million during the first quarter.

PSAI revenues were $72 million, leading to a marginal decline of 1.4% year over year.

Revenues at the Proprietary Products and Others segment came in at $16 million, in line with  the year-ago quarter.

Furthermore, research and development expenses were up 6.8% year over year to $79 million.

Also, selling, general and administrative expenses were $182 million, down 4.2% year over year.

As of Jun 30, 2017, the company has 99 generic filings (97 abbreviated New Drug Applications (ANDAs) and two new drug applications) that are pending for the FDA approval. Of these 97 ANDAs, 59 were Para IV filings and 26 have “first-to-file” status.

Our Take

Dr. Reddy’s witnessed year-over-year decline in the bottom line in first-quarter fiscal 2018, but sales rose year over yearEarnings came in below expectations due to price erosion due to U.S. customer consolidation, lower contribution from new product launches in the U.S. and the GST implementation in India.. Higher expenses related to product launches, along with reduced remediation costs, might put pressure on profits, going forward.

Nevertheless, we remain positive on the company’s efforts to expand its biosimilar portfolio, particularly in the emerging markets over the next few years.

 

Dr. Reddy's Laboratories Ltd Price, Consensus and EPS Surprise

 

Dr. Reddy's Laboratories Ltd Price, Consensus and EPS Surprise | Dr. Reddy's Laboratories Ltd Quote

Zacks Rank & Stocks to Consider

Dr. Reddy’s currently has a Zacks Rank #4 (Sell). Better-ranked health care stocks in the same space include Enzo Biochem, Inc. ENZ, Exelixis, Inc. EXEL and Sanofi SNY. While Enzo Biochem and Exelixis sport a Zacks Rank #1 (Strong Buy), Sanofi carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Enzo Biochem’s loss per share estimates narrowed from 12 cents to 7 cents for 2017 and from 11 cents to 3 cents for 2018, over the last 60 days. The company delivered positive earnings surprises in all the trailing four quarters, with an average beat of 55.83%. The share price of the company has increased 58.2% year to date.

Exelixis’ earnings per share estimates increased from 53 cents to 55 cents for 2018 over last 30 days. The company pulled off positive earnings surprises in all the trailing four quarters, with an average beat of 512.11%. The share price of the company has increased 85.3% year to date.

Sanofi’s earnings per share estimates increased from $3.18 to $3.24 for 2017 and from $3.30 to $3.38 for 2018, over last 30 days. The company came up with positive earnings surprises in two of the trailing four quarters, with an average beat of 5.10%. The share price of the company has increased 17.6% year to date.

More Stock News: 8 Companies Verge on Apple-Like Run Did you miss Apple's 9X stock explosion after they launched their iPhone in 2007? Now 2017 looks to be a pivotal year to get in on another emerging technology expected to rock the market. Demand could soar from almost nothing to $42 billion by 2025. Reports suggest it could save 10 million lives per decade which could in turn save $200 billion in U.S. healthcare costs.

A bonus Zacks Special Report names this breakthrough and the 8 best stocks to exploit it. Like Apple in 2007, these companies are already strong and coiling for potential mega-gains. Click to see them right now >>


Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
 
Sanofi (SNY): Free Stock Analysis Report
 
Enzo Biochem, Inc. (ENZ): Free Stock Analysis Report
 
Exelixis, Inc. (EXEL): Free Stock Analysis Report
 
Dr. Reddy's Laboratories Ltd (RDY): Free Stock Analysis Report
 
To read this article on Zacks.com click here.
 
Zacks Investment Research