Israeli generic drug maker Teva Pharmaceutical Industries said on Thursday its earnings in the first quarter of 2018 surged by over 80% from the same period the previous year. The company raised its outlook for the rest of the year, citing progress in an aggressive restructuring plan.
Teva said it had posted net income of $1.06 billion, or $1.03 a share, for the first quarter of 2018, up from $580 million, or 57 cents a share, a year earlier. The higher earnings came despite a 10% drop in sales.
"2018 is off to a solid start. ... Our strong first quarter performance, along with our confidence in executing the restructuring program, gives us a solid foundation to raise our guidance for the year," Chief Executive Kare Schultz said in a statement.
Teva, the world's No. 1 generic drugmaker, has been hit hard by price pressure and competition in its core generic business, the loss of patent protection on its blockbuster multiple sclerosis drug Copaxone, and a more than $30 billion debt load stemming from its acquisition of the generics business of Allergan.
The struggling company announced plans in December to cut 14,000 jobs, over one-quarter of its global workforce.
Schultz, who joined Teva last fall, said the restructuring plan is going well. He said the company has already eliminated over 6,000 jobs and managed to reduce its debt load to below $30 billion.
He said the company has a "good balance" of new generic products hitting the market as older ones come offline.
In light of the progress, Teva raised its 2018 revenue outlook to between $18.5 billion and $19 billion, up from its earlier forecast of $18.3 billion to $18.8 billion.
Despite the signs of progress, Teva said its first-quarter sales had slumped 10% to $5.065 billion from $5.65 billion a year earlier. It cited continued price pressure on its generic business, generic competition to Copaxone and the shedding of some noncore businesses.
With roots going back more than a century, Teva has grown into a major global player over the past 40 years with a series of acquisitions, and by developing original drugs and leading the move toward cost-saving generic medications. Its successes over the years are a source of pride in Israel.
The layoff plans triggered protests at Teva plants in Israel and prompted talks with Prime Minister Benjamin Netanyahu. But after talks with the unions, protests have died down.
