After its “black eye” in the third quarter, Allergan appeared to correct course as the year ended. It trotted out Street-beating earnings and revenue for the fourth quarter, and set out a 2017 forecast that demonstrates “continued, healthy growth,” an analyst said.
Allergan’s fourth-quarter adjusted earnings of $3.90 per share came in ahead of consensus estimates of $3.75, while its $3.86 billion in revenue also beat Street expectations.
Last year, after missing on earnings and sales in the third quarter, Allergan was forced to lower its full-year guidance as its established brands struggled. Despite the challenges, the company continued to maintain it was a “growth pharma.”
Now, Allergan is looking to make good on that pledge. It’s anticipating $15.5 billion to $15.8 billion in 2017 sales, or 7.4% growth at the midpoint.
In the fourth quarter, Botox and dry eye med Restasis each beat consensus expectations with sales of $739 million and $411 million, respectively.
Wells Fargo analyst David Maris wrote Wednesday that the company “delivered what it needed to … in order to begin to win back investor trust” following the Q3 debacle. He said Allergan’s 2017 outlook represents “continued, healthy growth” for the drugmaker.
But some of the Q4 strength may have been due to purchasing patterns, Bernstein analyst Ronny Gal wrote in a note. He said distributors bought heavily in the fourth quarter ahead of January price hikes, so that may have contributed to the company’s year-end performance. Sales for the current quarter may be weaker as a result, execs said on the company’s conference call Wednesday.
Following the company’s third-quarter miss, which Gal called a “black eye” on Allergan, the analyst wrote that execs “did not communicate convincing answers” about the shortfalls. He came around on Wednesday, though, saying he and his team “very much like” the new results.
For all of 2016, Allergan turned in $14.57 billion in sales, a 14.8% leap over the year before.
The company also took a chance Wednesday to talk up its “social contract,” pointing out that its average net price increases in the U.S. were 4.8% over 2016.