TEVA Q2 Earnings Beat, Revenues Miss on Lower Generics Sales

Core Insights - Teva Pharmaceutical Industries reported second-quarter 2025 adjusted earnings of 66 cents per share, exceeding the Zacks Consensus Estimate of 63 cents, with an 8% year-over-year increase in adjusted earnings driven by higher operating profits [1][7] - Revenues for the second quarter were $4.18 billion, falling short of the Zacks Consensus Estimate of $4.28 billion, remaining flat year over year on a reported basis and down 1% on a constant currency basis [1][2] Revenue Performance - Revenue growth was impacted as increased sales from branded drugs such as Austedo, Ajovy, and Uzedy were offset by declining generic drug sales in both U.S. and international markets, primarily due to the exit from Japan [2] - U.S. segment sales reached $2.15 billion, a 2% year-over-year increase, driven by branded drugs, although it missed the Zacks Consensus Estimate of $2.19 billion [3] - Generic/biosimilar product revenues in the U.S. declined 6% year over year to $961 million, missing the Zacks Consensus Estimate of $1.05 billion [4] Branded Drug Sales - Austedo sales in the U.S. were $495 million, up 22% year over year, although it missed the Zacks Consensus Estimate of $501.7 million [9] - Ajovy recorded sales of $63 million, a 53% year-over-year increase, surpassing the Zacks Consensus Estimate of $50.8 million [10] - Uzedy generated sales of $54 million, up 120% year over year, driven by volume growth [10] - Copaxone sales were $62 million, down 23% year over year, but exceeded the Zacks Consensus Estimate of $48.8 million [11] International Market Performance - Europe segment revenues were $1.3 billion, a 7% year-over-year increase, driven by higher revenues from Ajovy and generic products, beating the Zacks Consensus Estimate [12] - International Markets segment sales declined 17% year over year to $495 million, missing the Zacks Consensus Estimate of $602.4 million, primarily due to the divestment in Japan [13][14] Margin and Expense Analysis - Adjusted gross margin was 54.6%, up 170 basis points year over year, attributed to higher Austedo revenues and the sale of certain product rights [15] - Adjusted operating income rose 7% year over year to $1.13 billion, with an adjusted operating margin of 27.1% [17] Guidance Updates - Teva expects total revenues in 2025 to be between $16.8 billion and $17.2 billion, raising guidance for Austedo, Ajovy, and Uzedy sales [18][19] - Adjusted EPS is projected to be in the range of $2.5 to $2.65 per share for 2025, compared to the previous expectation of $2.45 to $2.65 [19]