I keep waiting for Teva Pharmaceuticals
That day won't be today. The company turned in another solid quarter, proving that bigger is better in the generic-drug world, and shares have moved up even more.
Revenue was up 20%, thanks to the addition of Barr Pharmaceuticals. Recent launches of generic versions of Shire's
After adjustments, mostly for the acquisition of Barr, income was up 25%, but that was diluted down to a 15% increase on a per-share basis, since Teva increased its share count substantially to make the purchase. Still, not too shabby.
Teva now expects to recognize $500 million in savings from the acquisition of Barr, up from $300 million when the purchase was announced. Those savings should help the company grow earnings next year by a solid 35%.
Bolstered by the addition of Barr, expect Teva to go shopping for more extrinsic growth. Additional revenue will help with margins, but Teva needs to keep from overpaying; it's likely to have increasing competition for acquisition targets now that pharma has gotten in on the act.
Generic drugs may be a value, but Teva is no value play. It's more all growth, all the time. As long as it doesn't falter, I think investors should continue to be rewarded.