What happened
Shares of Grifols (GRFS -1.88%) were up 11.1% on Tuesday afternoon, after being up as much as 13.1% earlier in the day. The pharmaceutical company, which makes plasma-derived medicines, released first-quarter earnings on Tuesday morning. The stock is down less than 1% so far this year. The company's products range from diagnostics to detect infectious agents in blood or plasma donations, to the production of antigens used in immunoassay regents, to albumin, used to restore circulatory volume and protein loss in certain conditions.
So what
Grifols released first-quarter earnings and revenue was up 23.2% year over year to 1.56 million euros ($1.71 million), led by gains in the company's biopharma segment. The company lost 108 million euros ($118 million) in the quarter, but that was due primarily to costs connected with laying off 8.5% of its workforce in a cost-cutting move, it said. In the long run, the cuts are expected to save the company $450 million a year from the personnel cuts.
The announcement comes a day after it announced a new leadership team, led by Thomas Glanzmann as new executive chairman and CEO. He is replacing Stephen F. Mayer, who resigned in February.
Now what
Investors apparently like the bold moves the company is making. Grifols also upgraded guidance to say management expected adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) to climb 21% for the first half of the year and to between 22% and 24% for the full year. The company had been hit hard by the COVID-19 pandemic, which led to fewer plasma donations, and that trend seems to be subsiding now. The company said that plasma collections are up 11% year over year and the cost of obtaining plasma is down 15%.
