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Dr. Reddy's (RDY) Q2 Earnings and Revenues Decline Y/Y

Dr. Reddy's Laboratories Ltd. RDY reported second-quarter fiscal 2018 earnings per American Depositary Share (ADS) of 26 cents, down from 27 cents in the year-ago quarter. However, revenues decreased 1.1% year over year to $543 million.

So far this year, the company’s share price decreased 19.7% compared with the industry’s decline of 29.4%.

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 fell 1.4% year over year to $438 million during the second quarter. The decline was owing to lower contribution from North America, offset by increased contribution from Europe, India and Emerging Markets.

PSAI revenues were $87 million, leading to a decline of 2.2% year over year. On a sequential basis, the top line registered a growth of 22% aided by improved order flow and supply situations.

Revenues at the Proprietary Products and Others segment came in at $18 million, up 5.9% from the year-ago quarter.

Furthermore, research and development expenses were down 20% year over year to $64 million.

Also, selling, general and administrative expenses were $169 million, down 6.1% year over year.

As of Sep 30, 2017, Dr. Reddy has 103 generic filings (100 abbreviated New Drug Applications (ANDAs) and three new drug applications) that are pending for the FDA approval. Of these 100 ANDAs, 60 were Para IV filings and 28 have first-to-file status.

Our Take

In second-quarter fiscal 2018, Dr. Reddy’s witnessed year-over-year decline in both the bottom line and the top line. Earnings came in below expectations due to price erosion, and increased competition. The company remains focused on launching of new products, as well as on improving operational efficiencies and quality management systems.

 

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 has a Zacks Rank #4 (Sell).Better-ranked health care stocks in the same space include Ligand Pharmaceuticals Incorporated LGND, Agenus Inc. AGEN and Adaptimmune Therapeutics plc ADAP. While Ligand sports a Zacks Rank #1 (Strong Buy), Agenus and Adaptimmune carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Ligand’s earnings per share estimates have moved up $3.68 to $3.70 for 2018 over the last 30 days. The company pulled off positive earnings surprises in two of the trailing four quarters, with an average beat of 6.19%. The share price of the company has increased 43.1% year to date.

Agenus’ loss per share estimates have narrowed from $1.40 to $1.36 for 2018 over the last 30 days. The company delivered positive earnings surprises in three of the trailing four quarters, with an average beat of 4.27%.

Adaptimmune’s loss per share estimates have narrowed from $1.03 to 95 cents for 2017 and from 95 cents to 90 cents for 2018 over the last 60 days. The company came up with positive earnings surprises in three of the trailing four quarters, with an average beat of 2.56%. The share price of the company has increased 93.8% year to date.

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Ligand Pharmaceuticals Incorporated (LGND): Free Stock Analysis Report
 
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