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ovenerio
Omar Venerio
Articles (1420) 

US Stock Market Opens Lower on Thursday

Teva's stock drops more than 4%

U.S. stock markets were trading lower Thursday morning despite the season of corporate earnings results. 

Shares of Teva Pharmaceutical Industries Ltd. (TEVAfell onThursday morning more than 4% after the company posted second-quarter earnings. The company recorded earnings per share of 78 cents on revenue of $4.billion. The company beats earnings estimates by 1cents, but fell short revenue estimates by $40 million.

GAAP gross profit was $2.1 billion, a decrease of 28% compared to the second quarter of 2017. GAAP gross profit margin was 43.8%, compared to 49.9% in the same trimester of 2017.

Gross profit from the North America segment was $1.2 billion, a decrease of 42% compared to $2.1 billion in the second quarter of 2017. The decrease is explained by lower revenues from its drug Copaxone and generic products. Gross profit margin for this segment was 53.2%, compared to 64.9%.

Gross profit from the Europe segment was $731 million, an increase of 6% compared to $692 million. The increase is explained by the positive impact of currency fluctuations. Gross profit margin was 55.0%, compared to 53.4%.

Gross profit from the international markets segment was $328 million, a decrease of 18% compared to $400 million. The decrease was due to lower gross profit in Japan and Russia. Gross profit margin decreased to 41.6%, compared to 45.2%.

Further, the earnings before interest, taxes, depreciationand amortization was $1.4 billion in the second quarter, down 20% compared to $1.7 billion in the second quarter of 2017.

Moreover, the cash flow generated from operations was $162 million, compared to $435 million in the second quarter of 2017. This minor cash generation was principally a consequence of higher payments related to the restructuring plan during the trimester.

For the full year, the company raised its outlook for adjusted earnings per share to $2.55 and $2.80 from $2.40 to $2.65. However, it was maintained the outlook for revenue between $18.5 billion and $19 billion.

Gainers

• CF Industries Holdings Inc. (NYSE:CF)

• Clorox Co. (NYSE:CLX)

• SCANA Corp. (NYSE:SCG)

• Exelon Corp. (NYSE:EXC)

Losers

• TripAdvisor Inc. (NASDAQ:TRIP)

• Unum Group (NYSE:UNM)

• Wynn Resorts Ltd. (NASDAQ:WYNN)

• Public Storage (NYSE:PSA)

Global markets

The main European stock markets traded in the red. The U.K.'s FTSE 100 retreated 1.24%, France's CAC 40 slid 0.23%, Germany's Dax fell 0.53% and Spain's Ibex 35 swelled 0.70%.

In Asia, markets closed low. Japan's Nikkei 225 slid 1.03%India’s BSE Sensex lost 0.95%, Hong Kong's Hang Seng fell 2.21% and China's Shanghai Composite retreated 2.00%.

Disclosure: The author holds no positions in any stocks mentioned.

About the author:

Omar Venerio
Omar Venerio is a capital markets, derivatives, corporate finance and financial management professor. He is passionate about the stock market and providing independent fundamental research and hedge fund and insider trading-focused investigation.

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