Viatris (VTRS) to Report Q1 Earnings: What's in the Cards?
Viatris VTRS, a global healthcare company, is scheduled to report first-quarter 2021 results on May 10.
The company was formed in November 2020 through the combination of Mylan and Upjohn. Prior to that, the company’s performance was excellent, beating earnings estimates in the trailing four quarters by 11.30%, on average.
Factors to Consider
Viatris reports segment information based on markets and geography. Following the formation of Viatris, the company has changed its reportable segments, from North America, Europe and the Rest of World, to Developed Markets; Greater China; Japan, Australia and New Zealand (JANZ); and Emerging Markets.
Net Sales from Developed markets have most likely seen an increase, primarily due to new product sales and incremental contribution from the Upjohn business.
Sales from Greater China markets have also likely witnessed growth due to the Upjohn business. However, growth might have been adversely impacted by lower net sales of existing products, driven by reduced volumes. Similar trends are likely to have prevailed in the JANZ market. However, the ongoing pandemic might have affected sales, somewhat.
Sales from Emerging Markets too have likely seen an increase in the to-be-reported quarter, driven by net sales from the Upjohn business and new product sales, including remdesivir in India and other emerging markets.
During the fourth quarter of 2020, Viatris announced a widespread global restructuring program in order to achieve synergies of $1 billion. The restructuring initiative incorporates and expands on the restructuring program announced by Mylan N.V. earlier in 2020, as part of its business transformation efforts. The company expects to optimize its commercial capabilities and enabling functions, and close, downsize or divest up to 15 manufacturing facilities globally that are deemed to be no longer viable either due to surplus capacity, challenging market dynamics or a shift in its product portfolio toward more complex products. As a result, Viatris expects that up to 20% of its global workforce (approximately 45,000) may be negatively impacted upon the completion of the restructuring initiative. An update on the same is expected on the call.
Share Price Performance
Viatris’ stock has lost 28% in the year so far compared with the industry’s decline of 2%.
Earnings Whispers
Our proven model does not conclusively predict an earnings beat for Viatris this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. Unfortunately, that is not the case here, as you will see below. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter.
Earnings ESP: Earnings ESP for Viatris is -4.58%.
Zacks Rank: The company currently carries a Zacks Rank #4 (Sell).
Stocks to Consider
Here are a few stocks you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this season.
Ironwood Pharmaceuticals IRWD has an Earnings ESP of +0.25% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
Kala Pharmaceuticals, Inc. KALA has an Earnings ESP of +3.45% and a Zacks Rank #2.
bluebird bio BLUE has an Earnings ESP of +0.52% and a Zacks Rank #3.
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