CHICAGO, Feb. 7, 2012 /PRNewswire/ --Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include Dr. Reddy's Laboratories (NYSE: RDY), Eli Lilly & Co. (NYSE: LLY), Johnson & Johnson (NYSE: JNJ), Pfizer Inc. (NYSE: PFE) and AstraZeneca (NYSE: AZN).
(Logo: http://photos.prnewswire.com/prnh/20101027/ZIRLOGO)
Get the most recent insight from Zacks Equity Research with the free Profit from the Pros newsletter: http://at.zacks.com/?id=5513
Here are highlights from Monday's Analyst Blog:
Dr. Reddy's Going Strong
Dr. Reddy's Laboratories (NYSE: RDY) reported third quarter fiscal 2012 earnings per American Depositary Share (ADS) of 60 cents, significantly above the year-ago earnings of 30 cents per ADS. Higher revenues boosted earnings.
Quarter at a Glance
The company reported revenues of $522 million during the quarter, reflecting a year-over-year increase of 46%. Dr. Reddy's reports revenues under two segments - Global Generics and Pharmaceutical Services & Active Ingredients (PSAI). While revenues at the Global Generics segment jumped 57% to $402 million, PSAI revenues climbed 12% to $105 million during the quarter.
Generics revenues soared 133% in North America, 15% in Russia and other CIS (Commonwealth of Independent States) markets, 14% in Europe and 11% in India. Growth was mainly driven by the launch of a generic version of Eli Lilly & Co.'s (NYSE: LLY) Zyprexa (olanzapine) 20 mg. Dr. Reddy's currently has 180-day marketing exclusivity for the generic drug. Since generic Zyprexa was launched in the third quarter of fiscal 2012, the exclusivity runs till the fourth quarter of fiscal 2012. The company expects the Generic segment revenues to benefit from the generic launch even in the fourth quarter but not as much as in the third quarter.
Additionally, new product launches aided Generic segment revenues and the Pharmaceutical Services segment mainly contributed to PSAI revenues. Both the segments gained from exchange rate fluctuation.
Gross margin at Dr. Reddy's inched up from 59% in the year-ago quarter to 60% in the reported quarter. Gross margin improved due to higher revenues and exchange rate fluctuation.
Selling, general and administration (SG&A) expenses amounted to $145 million, reflecting an increase of 20%. Higher freight charges, increased manpower and exchange rate fluctuation led to the rise in SG&A costs.
Increased research and development (R&D) activities led to a 16% surge in R&D expenses, which came in at $29 million.
During the quarter, Dr. Reddy's launched 33 new generic products, filed 16 new product registrations, and 7 drug master files (DMF) globally. The total number of abbreviated new drug applications (ANDAs) awaiting US Food and Drug Administration (FDA) approval were 79 at the end of the quarter. Of the 79 ANDAs, 40 were Para IV filings and 10 are first-to-file.
Our Take
We currently have a Neutral recommendation on Dr. Reddy's. The stock carries a Zacks #2 Rank (Buy rating) in the short-run. We expect generic Zyprexa to continue contributing to the company's revenues, given the drug's exclusivity till the fourth quarter of fiscal 2012.
Moreover, we believe Dr. Reddy's is in a strong position to benefit from the huge potential presented by the US generics market, as quite a few blockbuster drugs such as Johnson & Johnson's (NYSE: JNJ) Concerta and Pfizer Inc.'s (NYSE: PFE) Lipitor have lost patent exclusivity and more drugs are slated to go off-patent in the coming years.
AstraZeneca Beats by a Whisker
AstraZeneca (NYSE: AZN) reported fourth-quarter 2011 core adjusted earnings of $1.61 per American Depositary Share ("ADS"), a penny above the Zacks Consensus Estimate of $1.60. Earnings were up 12% (at constant exchange rates [CER]) year over year, benefiting from share repurchases, lower tax rate and lower net finance expense.
AstraZeneca's quarterly revenues remained flat (at CER) year over year at $8.7 billion, owing to intense generic competition and government price interventions. However, revenues were just above the Zacks Consensus Estimate of $8.6 billion.
Full year earnings came in at $7.28 per share, ahead of the Zacks Consensus Estimate of $7.25 and 7% (at CER) above the year-ago earnings. Full year revenues fell 2% (at CER) to $33.6 billion, just above the Zacks Consensus Estimate of $33.5 billion.
All growth rates mentioned below are on a year-on-year basis and at constant exchange rates.
Neutral on AstraZeneca
We currently have a Neutral recommendation on AstraZeneca. The stock carries a Zacks #3 Rank (Hold rating) in the short run. Even though we are encouraged by the strong cardiovascular franchise at AstraZeneca and the company's focus on the high-potential emerging markets, we remain concerned about the generic competition faced by its key products. The company is looking to lessen the impact of genericization by reducing its cost structure through restructuring initiatives.
Want more from Zacks Equity Research? Subscribe to the free Profit from the Pros newsletter: http://at.zacks.com/?id=5515.
About Zacks Equity Research
Zacks Equity Research provides the best of quantitative and qualitative analysis to help investors know what stocks to buy and which to sell for the long-term.
Continuous coverage is provided for a universe of 1,150 publicly traded stocks. Our analysts are organized by industry which gives them keen insights to developments that affect company profits and stock performance. Recommendations and target prices are six-month time horizons.
Zacks "Profit from the Pros" e-mail newsletter provides highlights of the latest analysis from Zacks Equity Research. Subscribe to this free newsletter today: http://at.zacks.com/?id=5517
About Zacks
Zacks.com is a property of Zacks Investment Research, Inc., which was formed in 1978 by Leon Zacks. As a PhD from MIT Len knew he could find patterns in stock market data that would lead to superior investment results. Amongst his many accomplishments was the formation of his proprietary stock picking system; the Zacks Rank, which continues to outperform the market by nearly a 3 to 1 margin. The best way to unlock the profitable stock recommendations and market insights of Zacks Investment Research is through our free daily email newsletter; Profit from the Pros. In short, it's your steady flow of Profitable ideas GUARANTEED to be worth your time! Register for your free subscription to Profit from the Pros at http://at.zacks.com/?id=5518.
Visit http://www.zacks.com/performance for information about the performance numbers displayed in this press release.
Follow us on Twitter: http://twitter.com/zacksresearch
Join us on Facebook: http://www.facebook.com/home.php#/pages/Zacks-Investment-Research/57553657748?ref=ts
Disclaimer: Past performance does not guarantee future results. Investors should always research companies and securities before making any investments. Nothing herein should be construed as an offer or solicitation to buy or sell any security.
Media Contact
Zacks Investment Research
800-767-3771 ext. 9339
support@zacks.com
http://www.zacks.com
SOURCE Zacks Investment Research, Inc.
