Endo International Plc. (ENDP, Financial) reported its earnings for the fourth quarter and full-fiscal 2014, with higher revenues driving growth in the company’s year-over-year quarterly earnings. Endo logged a 37% growth in revenues for Q4 2014 to $800 million compared to the prior-year quarter, well ahead of the consensus estimate figure of $788 million. In terms of EPS, the company reported a 21% increase from the year-ago period to $1.16 per share, beating the consensus estimate figure of $1.13 per share. For the full-fiscal 2014, Endo saw a 10% fall in earnings to $4.31 per share, although revenues increased 10% compared to the last fiscal to $2.9 billion. Following the results, the Endo stock rose to a 52-week high of $89.88 during trading hours before settling at $87.32 a share.
Higher sales across segments helps cut losses
Endo International Plc reported a 49% increase to $185 million in the company’s adjusted net income for the fourth quarter of 2014, helping the company cut its net loss from $776 million in the prior-year quarter to $53 million. The company’s diluted loss per share for the quarter stood at 35 cents compared to the loss per share of $6.74 for the year-ago quarter.
Segmentwise, Endo reported 70% growth to $337.4 million in net sales at its Generic Pharmaceuticals division in the fourth quarter, driven by greater segmental sales following the company’s acquisition of products from DAVA Pharmaceuticals and Boca Pharmaceuticals during the earlier quarters of fiscal 2014. Endo’s launch of its authorized generic version of the drug Lidoderm in May 2014 also supported segmental sales. However, the company’s Branded Pharmaceuticals division saw a 3% decline in sales to $245.8 million on the back of reduced sales of its painkiller medications such as Opana ER and Fortesta Gel.
Revenues from the company’s Devices division saw a 4% jump to $137.1 million compared to the prior-year quarter. Concurrently, Endo’s newly established International Pharmaceuticals division saw a fall in revenues to $79.7 million in the fourth quarter compared to the year-ago quarter’s figure of $93.8 million.
Outlook for 2015
Endo International also provided an upbeat guidance for fiscal 2015. With the company having entered an agreement to sell its American Medical Systems'Â Men’s Health and Prostate Health businesses to Boston Scientific (BSX, Financial) for around $1.65 billion in 2015, and the company looking to divest its AMS Women’s Health business also, results from Endo’s Devices division for the new fiscal would be reported as "discontinued operations."
The company projected an EPS of around $4.35 to $4.55 per share for FY2015, coming from revenues in the range of $2.9-3 billion. The figures fall shy of consensus estimates that peg Endo’s revenue for FY2015 at $3.3 billion and EPS at $4.87 a share. The company, which competes with Actavis Plc (ACT, Financial) and Abbott Laboratories (ABT, Financial) in the pharmaceuticals and health solutions market, plans to continue expanding its international business, aiming to generate at least 25% of its revenues from markets outside the U.S.
Final thoughts
Endo International delivered a robust Q4 2014 performance, helping the company cut losses for the full fiscal 2014 and putting it on track for a better run in 2015. While the company is amid plans to divest its underperforming assets, Endo is also looking at acquiring businesses that would add to its product portfolio and help boost its top line. The company acquired Auxilium Pharmaceuticals (AUXL, Financial) in January 2014, in this direction.
Although the company’s own guidance falls short of consensus estimates, experts foresee an annual growth rate of 7.67% for the company over the next five years, with a peak of 14.47% during fiscal 2015. Consequently, the Endo stock currently carries ‘buy’ guidance for the short to mid-term.
