Why Impax Labs Is Crashing 23.44% Today
Image source: Getty Images.
What happened
After reporting third-quarter results below industry watchers' forecast and lowering full-year guidance,Impax Laboratories (NASDAQ: IPXL)shares are dropping 23.44% at 2:00 p.m. EST Wednesday.
So what
The generic drug company's sales increased 3.1% year over year to $227.9 million, and EPS came in at $0.37. Analysts were looking for sales and EPS of $234.75 million and $0.39, respectively.
In the quarter, a 30% increase in specialty pharmaceuticals sales due to higher sales of Rytaryand Zomig nasal spray were offset by a 3% decline in the company's generic drug segment. Generic drug sales were negatively impacted by market share losses on the company'sdiclofenac sodium gel 3%, mixed amphetamine salts, and metaxalone.
The performance led management to lower its full-year sales outlook to between$840 million and $855 million from previously announced expectations of between $900 million and $940 million. Management also cut its adjusted EPS guidance to $1.10 to $1.20 from $1.57 to $1.70.
Now what
Impax Laboratories recently acquired 15 generic drugs from Teva Pharmaceuticaland that did offset some of the headwind from lost diclofenac sales. Sales and profit uncertainty, however, remains a big overhang on this company's stock. Until it can prove to investors that it's overcoming obstacles, I think it's best to focus on other investment ideas that have a clearer path to upside.
10 stocks we like better than Impax Laboratories When investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*
David and Tom just revealed what they believe are the ten best stocks for investors to buy right now... and Impax Laboratories wasn't one of them! That's right -- they think these 10 stocks are even better buys.
Click here to learn about these picks!
*Stock Advisor returns as of November 7, 2016
Todd Campbell has no position in any stocks mentioned.Todd owns E.B. Capital Markets, LLC. E.B. Capital's clients may have positions in the companies mentioned.Like this article? Follow him onTwitter where he goes by the handle@ebcapitalto see more articles like this.
The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.