Hi-Tech Lo-Balls Earnings
- Posted by Danny
- on March 8th, 2012
502 Bad Gateway
The generic druggie shanks estimates as top and bottom lines miss.
Kicked in the groin. Or more like punched in the nose after Hi-Tech Pharmacal ($HITK) reported Q3 this morning that missed the Street by a bunch on EPS. We had them pegged at $1.01 on Estimize…waaay off. In hindsight, we should have considered the warmer-than-usual winter’s effect on Fluticasone Propionate (Flonase) sales, HITK’s main revenue driver.
Nevertheless, sales were still up year-over-year while income increased slightly. Here’s the lo-down:
- Total net sales +12%
- Net income up < 1%
- Net sales (generics) +17%
- Flonase sales +22%
- ECR division sales -21%
- HCP divison sales +2%
- Expenses +18%
- R&D +13%
Though Flonase unit sales were actually up nicely from last year, they sold for a lower average price. It doesn’t help that there’s more competition for the nasal spray drug either. HITK still has a good bit of market share though.
Q3 EPS also declined 5 cents YoY from 84c to 79c due to “an increase in shares outstanding driven by option exercises.”
From CEO David Seltzer:
“Hi-Tech has continued with strong performance again this quarter despite a mild cough, cold and flu season. The Company’s largest selling product, Fluticasone Propionate nasal spray, an allergy medication, continues to sell extremely well. The Company has strategically focused on positioning itself for continued growth by increasing production to meet customer demand for the upcoming allergy season. Our balance sheet remains strong and the Company continues to seek new opportunities through research and development, and product acquisitions.”
In a move that looks to diversify its nasal spray line, HITK’s management also announced an agreement to acquire a line of honker products from Dynova Labs.
Slipping from the top spot to #2 in the BeanScreen this month, we initiated a position last summer in HITK at $28.75. A few months ago we peeled some off at $41, and now hold a core position that may or may not be sold off pending the revised FA after this latest report.
sources: Hi-Tech Pharmacal Reports Sales of $55.6 Million and EPS of $0.79 for the Third Quarter Ended January 31, 2012 – BusinessWire
Hi-Tech Pharmacal Acquires a Line of Branded Homeopathic Nasal Spray Products – Y! Finance
Wockhardt to launch generic version of rhinitis drug Flonase nasal spray – PharmaBiz.com
disclosure: we currently own shares in HITK
The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.blog comments powered by Disqus
Daniel Miller and Jason Robinson are self taught investors based in Daphne, Alabama, and are the co-founders of the WallStreetBean. Neither one of them are professional investors - just two regular guys who want to share their investing ideas and thoughts with others. More