Concordia misses by $0.02, reports revs in-line; lowers FY16 guidance below consensus; suspends dividend; CFO stepping down  (16.36)
8/12/2016, 7:08:35 AM ET
  • Reports Q2 (Jun) earnings of $1.38 per share, excluding non-recurring items, $0.02 worse than the Capital IQ Consensus of $1.40; revenues rose 208.1% year/year to $231.7 mln vs the $232.57 mln Capital IQ Consensus.
  • Co issues downside guidance for FY16, lowers FY16 revs to $859-888 mln from $1.02-1.06 bln vs. $939.14 mln Capital IQ Consensusl lowers adjusted EBITDA to $510-540 mln from $610-640 mln; ~66 percent of revenues to be generated outside the U.S; target 2016 year-end Net Debt/EBITDA of 6.4x or below.
    • Changes to financial guidance are primarily due to the following business factors:
    • Reduction in the GBP/USD foreign exchange rate Introduction of generic competition for Nilandron in July 2016
    • Competitive marketplace pressures with respect to two key products: Donnatal and Plaquenil
  • Adrian de Saldanha, Concordia’s Chief Financial Officer, will be leaving the organization to pursue other opportunities. Mr. de Saldanha will be replaced by Concordia’s current Executive Vice President, Edward Borkowski. Mr. de Saldanha will remain with the Company during a transition period.
  • Concordia’s Board unanimously agreed to suspend the $0.075 dividend per common share, payable quarterly. The Company believes the dividend payments can be better deployed towards long-term value-creating initiatives or debt repayment.
  • Courtesy of

This one is so ridiculous i,m afraid of it.

blog cxrx fib mm 8-12-2016

Above is an enlargement of the measured move I used to arrive at a target.

blog cxrx d 8-12-2016

Here we have the current chart as of this morning.

If we use the FY16 projected earnings of $6.53 the current P/E is 1.76.

As you read in CXRX’s report this morning they are receiving new competition on two drugs that have gone off patent.

They reduced their guidance by 50 to 80 million which i assume (ohoh) is the anticipated loss in revenue from those two drugs.

I’m sure that everyone is anticipating   a cut in EPS guidance but if they cut it in half (highly unlikely) the new forward P/E would be 3.1.

The first chart above shows how and where I measured the Fibonacci Retracement that gives us a target of $9.97.

As I have been writing CXRX as fallen to $11.05. At $10.11 or when CXRX forms a cup and handle reversal I will enter.

Dave C


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