Analysts said Teva Pharmaceutical's overall first-quarter results were solid, but said a sticking point for some on Wall Street was the large role favorable currency exchange rates played in boosting revenue.
American Depositary Shares of the Israeli company fell 61 cents, or 1.3 percent, to $46.71.
Earlier Tuesday, the world's largest maker of generic drugs reported a drop in first-quarter profit on a hefty charge related to its purchase of CoGenesys, but adjusted earnings topped Wall Street expectations by a penny. Revenue growth of 24 percent to $2.57 billion also beat analysts' $2.53 billion estimate.
On a conference call, Teva reaffirmed its outlook for 2008 profit of $2.60 to $2.75, excluding one-time items, on sales of about $10.75 billion and said it still expects 2009 profit to exceed $3 per share.
Wall Street has predicted 2008 earnings per share of $2.71 on revenue of $10.79 billion, on average, and 2009 profit of $3.02.
Goldman Sachs analyst Randall Stanicky said results overall were solid, with favorable foreign exchange rates mostly the reason for the upside to revenue estimates. He noted that Teva disclosed the write-off of $52 million in auction rate securities, which he didn't anticipate and which he thinks trimmed earnings per share by about a nickel.
Stanicky also said operating and R&D costs were higher than he had expected, but they were partially offset by a lower-than-modeled tax rate.
Cowen analyst Ken Cacciatore also said the quality of Teva's earnings report was "solid," although North American generics sales _ the key focus for most investors _ were just a bit light at $1.2 billion, roughly $50 million off his target.
He thinks one potential sticking point with Wall Street will likely be the currency exchange benefit, which appeared relatively high in the first quarter, but said overall, the Street should be pleased with the strength shown throughout Teva's various divisions and regions. He expected the company to back its full-year outlook.
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