The Exton, Penn.-based company posted profits of $38.8 million, or 51¢ per share, on sales of $397.6 million for the 3 months ended June 30, for bottom-line loss of -13% on sales growth of 2.5% compared with the same period last year.
Adjusted to exclude 1-time items, earnings per share were 66¢, a penny ahead of consensus on The Street, where analysts were looking for sales of $406 million.
“Following a strong start to the year, we generated approximately 4% organic sales growth in the second-quarter,” president & CEO Eric Green said in prepared remarks. “However, due to an unfavorable sales mix in the quarter, our margins did not meet our expectations.”
“Strong contract-manufactured products sales growth and solid performance of the pharma market unit did not offset the softness in the generics market unit and, to a lesser extent, biologics market unit, which were impacted by customer inventory management and delays in several new drug launches. In addition, our generics unit experienced lower volumes from select customers that have had their production impacted by regulatory issues.”
“We believe that we are taking the appropriate actions to bring our full-year 2017 results in-line with our updated guidance. We see no fundamental change in the markets we serve. We have confidence in our strategy and our long-term view of West’s ability to grow organic sales 6% to 8% per year with expanding margins for the next several years. West has participated on 100% of the newly-approved biologic drugs in the U.S. this year, and we are encouraged by indications that a number of large customers are resuming their typical order patterns. We continue to invest in our business to fuel our long-term growth potential and are managing our costs. Based on market dynamics and customer order patterns, we expect sales performance to continue to build over the balance of the year, with normal seasonality trends for the third and fourth quarters,” Green added.
West said it expects to post adjusted EPS of $2.66 to $2.73 on sales of $1.59 billion to $1.6 billion. That’s narrowed from the company’s previously-announced range of $2.66 to $2.78 on sales of $1.59 billion to $1.61 billion.
WST shares were trading at $91.85 apiece today in afternoon trading, down -0.8%.