Teva Pharmaceutical Industries Ltd. (NYSE: TEVA; TASE: TEVA) has announced that it will lay off 3,000 employees worldwide over the next two years. The unexpected announcement came during the conference call with investors after the company announced its first quarter results. Teva has 36,000 employees worldwide, including 3,320 in Israel, so the planned cut represents 8% of the workforce.
The company's share price opened 5.4% higher on Wall Street, giving a market cap of $20.4 billion. In recent weeks the share price has been moving up, although it has still lost 25% since reporting its fourth quarter 2004 results.
In its first quarter 2025 financial results, Teva revised its 2025 guidance with lower revenue but higher profit. The Israeli pharmaceutical company now expects $16.8-17.2 billion revenue, slightly lower than its previous forecast of $16.8-17.4 billion, and non-GAAP earnings per share of $2.45-2.65, instead of $2.35-2.65.
In the first quarter, Teva reported revenue of $3.9 billion, up 2% from the corresponding quarter of 2024 and below the analysts' expectations of $4 billion. GAAP net profit in the first quarter was $214 million, swinging from a loss in the corresponding quarter, while non-GAAP net profit was $602 million, up 10% from the corresponding quarter. Non-GAAP earnings per share was $.052, beating the analysts' forecast of $0.46.
Free cash flow in the quarter was $107 million, and Teva's debt fell from $17.8 billion to $16.7 billion during the quarter.
Grew in the US but hit in Europe
Geographically, Teva grew in its core market, the US, but was hurt by exchange rate movements in other markets. In the US, both revenue and profitability increased quarterly. Revenue grew 10.7% to $1.9 billion, mainly due to the contribution of the original drugs Austedo and Uzedy, and a 5% increase in generic sales. Profitability increased 52% - from $350 million in the corresponding quarter to $532 million, due among other things, to the product mix sold.
In Europe, revenue fell 6.1% to $1.2 billion, and profitability fell 22% to $329 million. Revenue was negatively affected by currency movements, and profitability was also affected by the product mix. In international markets, revenue fell 2.5% to $582 million, but excluding exchange rate changes, revenue would have increased 5%. Profitability fell 17% to $97 million.
Teva president & CEO Richard Francis said, "Teva had a solid start to the year, with its ninth consecutive quarter of revenue growth, delivering global revenues of $3.9 billion, an increase of 5% in local currency terms compared to the first quarter of 2024. Our key innovative growth drivers continue to show strong momentum, collectively generating revenues of $589 million while each growing more than 25% year over year. We also achieved solid generics performance across all regions with biosimilars rounding out the portfolio."
He added, "Now entering the Acceleration Phase of our Pivot to Growth Strategy, we have a clear roadmap to continue Teva's transformation into a leading biopharmaceutical company with an expected 30% operating margin and today have announced ~$700 million net savings by 2027. We’re accelerating innovative growth and strengthening our generics business, while streamlining our operations, sharpening our business and optimizing processes. With these results, we are revising our 2025 outlook and reaffirming our 2027 targets."
Published by Globes, Israel business news - en.globes.co.il - on May 7, 2025.
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