It has been about a month since the last earnings report for Emergent Biosolutions (EBS). Shares have lost about 24.2% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Emergent Biosolutions due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Emergent Q4 Earnings, Revenues Surpass Estimates
Emergent BioSolutions’ fourth-quarter 2018 earnings of 75 cents per share beat the Zacks Consensus Estimate of 61 cents and also came in higher than the year-ago bottom-line figure of 74 cents.
Revenues in the reported quarter surged 39.7% from the year-ago period’s level to $270.7 million, primarily backed by high product sales owing to the company’s recent acquisitions. The top line also surpassed the Zacks Consensus Estimate of $268 million.
Quarter in Detail
Total product sales rose 34.4% to $217.4 million from the year-earlier quarter’s tally. The revenue uptick was mainly on the back of contribution from Narcan nasal spray, Vivotif and Vaxchora vaccine, all of which was acquired last October.
BioThrax’s sales increased 25.5% year over year in the reported quarter to $134.3 million. Other product sales declined to $41.4 million from $54.7 million in the comparable quarter last year. Newly acquired product Narcan (naloxone HCl) nasal spray added $41.7 million to product sales.
Contracts, grants and collaboration revenues soared 66% year over year to $26.4 million, primarily owing to greater R&D activities, associated with certain development funding programs, most notably, NuThrax (anthrax vaccine).
Contract manufacturing revenues jumped 66% to $26.9 million compared with the year-ago tally. This upside was primarily attributed to the completion of certain contract manufacturing services at the company’s Camden site.
Research and development (R&D) expenses were $52 million, up 82% from the level in the comparable period a year ago. This downside was due to higher costs associated with contract development services pertaining to NuThrax (anthrax vaccine).
Selling, general and administrative (SG&A) expenses were $81 million, up 94% from the level in the comparable quarter last year due tohigher cost incurred from the acquisition of PaxVax and Adapt Pharma.
2019 Outlook
Emergent expects revenues in the range of $1.06-$1.14 billion in 2019. The company anticipates adjusted net income in the band of $150-$180 million and adjusted EBITDA in the range of $280-$310 million.
In the first quarter of 2019, the company anticipates total revenues within $185-$205 million.
How Have Estimates Been Moving Since Then?
Fresh estimates followed a downward path over the past two months. The consensus estimate has shifted -39.02% due to these changes.
VGM Scores
Currently, Emergent Biosolutions has a poor Growth Score of F, however its Momentum Score is doing a lot better with a B. Charting a somewhat similar path, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Emergent Biosolutions has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Emergent Biosolutions Inc. (EBS): Free Stock Analysis Report
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