West Pharmaceutical Services, Inc. (NYSE: WST) announced its financial results for the fourth-quarter and full-year 2021 and introduced full-year 2022 financial guidance.
The results topped Wall Street expectations. The average estimate of four analysts surveyed by Zacks Investment Research was for earnings of $1.92 per share.
The sustainability of the stock’s immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management’s commentary on the earnings call.
West Pharmaceutical shares have lost about 19.1% since the beginning of the year versus the S&P 500’s decline of -6.1%.
“We had a successful 2021 with record organic sales growth and gross operating margin expansion,” said Eric M. Green, President, and Chief Executive Officer.
“Our performance was fueled by execution across our Proprietary market units and all geographies as we serve to improve patients’ lives. Our business generated strong double-digit organic sales growth in the fourth-quarter and full-year 2021, led by sales of high-value products (HVP).”
Fourth-Quarter Highlights
Fourth-quarter 2021 net sales of $730.8 million grew 26.0%; organic sales growth was 28.3%. Full-year 2021 net sales of $2.832 billion grew 31.9%; organic sales growth was 29.4%.
Fourth-quarter 2021 reported-diluted EPS of $1.93 increased 49.6%. Full-year 2021 reported-diluted EPS of $8.67 increased 89.7%.
Fourth-quarter 2021 adjusted-diluted EPS of $2.04 increased 52.2%. Full-year 2021 adjusted-diluted EPS of $8.58 increased 80.3%.
The company is introducing full-year 2022 financial guidance of net sales in a range of $3.050 billion to $3.075 billion and reported-diluted EPS in a range of $9.20 to $9.35.
What’s Next for West Pharmaceutical?
While West Pharmaceutical has underperformed the market so far this year, the question that comes to investors’ minds is: what’s next for the stock?
There are no easy answers to this key question, but one reliable measure that can help investors address this is the company’s earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately.
Another stock from the same industry, Antares Pharma (ATRS), has yet to report results for the quarter ended December 2021.
This drugmaker is expected to post quarterly earnings of $0.01 per share in its upcoming report, which represents a year-over-year change of -66.7%. The consensus EPS estimate for the quarter has been revised 33.3% higher over the last 30 days to the current level.
Antares Pharma’s revenues are expected to be $46.57 million, up 5.5% from the year-ago quarter.
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WEST PHARMACEUTICAL SERVICES, INC. |
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CONSOLIDATED STATEMENTS OF INCOME |
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(UNAUDITED) |
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(in millions, except per share data) |
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Three Months Ended December 31, |
Twelve Months Ended |
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|
2021 |
2020 |
2021 |
2020 |
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|
Net sales |
$730.8 |
100% |
$580.2 |
100% |
$2,831.6 |
100% |
$2,146.9 |
100% |
|
Cost of goods and services sold |
430.2 |
59 |
369.1 |
64 |
1,655.8 |
58 |
1,379.1 |
64 |
|
Gross profit |
300.6 |
41 |
211.1 |
36 |
1,175.8 |
42 |
767.8 |
36 |
|
Research and development |
13.7 |
2 |
12.9 |
2 |
52.8 |
2 |
46.9 |
2 |
|
Selling, general and |
98.0 |
13 |
76.3 |
13 |
362.8 |
13 |
302.0 |
14 |
|
Other expenses (income), net |
4.9 |
1 |
5.8 |
1 |
7.9 |
– |
12.0 |
1 |
|
Operating profit |
184.0 |
25 |
116.1 |
20 |
752.3 |
27 |
406.9 |
19 |
|
Interest expense, net |
2.3 |
– |
1.9 |
– |
7.2 |
– |
6.8 |
– |
|
Other non-operating (income) |
(0.2) |
– |
(0.9) |
– |
(3.8) |
– |
(1.2) |
– |
|
Income before income taxes |
181.9 |
25 |
115.1 |
20 |
748.9 |
27 |
401.3 |
19 |
|
Income tax expense |
34.2 |
5 |
20.4 |
4 |
107.2 |
4 |
72.5 |
4 |
|
Equity in net income of |
– |
– |
(3.7) |
(1) |
(20.1) |
(1) |
(17.4) |
(1) |
|
Net income |
$147.7 |
20% |
$98.4 |
17% |
$661.8 |
24% |
$346.2 |
16% |
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Net income per share: |
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Basic |
$1.98 |
$1.33 |
$8.89 |
$4.68 |
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Diluted |
$1.93 |
$1.29 |
$8.67 |
$4.57 |
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Average common shares |
74.5 |
74.0 |
74.4 |
73.9 |
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Average shares assuming |
76.4 |
76.1 |
76.3 |
75.8 |
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