Generic medicine manufacturer Viatris (VTRS) launched a dividend on Monday, but VTRS shares fell after the company issued a lower outlook for 2021.
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For the full year, Viatris expects $ 17.2 billion to $ 17.8 billion in sales. Ami Fadia, analyst at SVB Leerink, said in a report to clients that it was well below the average analysis estimate for $ 18.4 billion.
Viatris also asked for adjusted earnings of $ 6 to $ 6.4 billion before interest, tax, depreciation and amortization, or EBITDA, and expects free cash flow to reach $ 2 billion to $ 2.3 billion. Both measures missed analyst forecasts for $ 7.2 billion and $ 3.8 billion, respectively.
The earnings and cash flow are likely to be missed by investors in VTRS shares, Fadia said.
“We believe that the volume of the mist, especially with regard to EBITDA and (free cash flow), was not expected and we expect the stock to trade lower today,” she said.
VTRS Stock drops on lead Miss
In the morning trading on today’s stock market, the VTRS share fell 11.3% near 16.20. This has put stocks at their lowest point since November.
Viatris is a combination of Mylan, a manufacturer of generic medicines and EpiPen allergic reaction injection, and Pfizer‘s (PFE) parent drug company called Upjohn. Analysts expected the lead, Viatris’ first prospect after the merger.
Michael Goettler, CEO of Viatris, called the company “the ‘trough year’.
“We are confident that our financial guidance for 2021 is the right starting point for Viatris, and we will continue to expect that 2021 will be our troubling year in terms of revenue, adjusted EBITDA and free cash flow, reflecting a balanced view of both “Short-term backwind and headwind, especially given the delay in closing the combination between Mylan and Pfizer’s Upjohn business,” he said in a written statement.
Generic medicine maker launches dividend
For the VTRS stock investors, the company announced an annual dividend of 44 cents. Due to the timing of the start of the dividend, the company expects to make three payments in 2021, totaling $ 400 million. It plans to declare the first 11-cent payment in May and pay it off in June.
Look at the best dividend stocks.
Yet the VTRS shares tumbled on the news. Shares fell below the bottom line of a flat base, with a buying point at 18.96, according to MarketSmith.com.
Follow Allison Gatlin on Twitter @IBD_AGatlin.
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