West Pharmaceutical Services (WST.N), a leading medical equipment maker, announced on Thursday that it has revised its 2023 adjusted profit forecast upward for the third time, capitalizing on the strength of the U.S. dollar. The company, known for its production of critical components used in the delivery and packaging of injectable therapies, also exceeded expectations for its third-quarter profits.
In the third quarter, West Pharmaceutical Services reported net sales of $747.4 million, although this figure fell slightly short of London Stock Exchange Group (LSEG) estimates, which had anticipated sales of $750.31 million. The company’s revenues have been impacted over recent quarters due to reduced demand for products associated with COVID-19 vaccines and therapies, which had previously driven substantial growth.
The decline in demand for COVID-related products over the past year has had a ripple effect across the pharmaceutical industry. This change in market dynamics prompted drugmaker Pfizer (PFE.N) to revise its full-year revenue forecast downward by 13% earlier this month and announce a cost-cutting program worth $3.5 billion.
West Pharmaceutical Services’ situation, however, is not isolated. Just last month, Swiss medical technology firm Ypsomed (YPSN.S) inked a significant long-term supply agreement with Novo Nordisk (NOVOb.CO). This deal involves the provision of autoinjectors for the next generation of weight loss and diabetes drugs, both of which are currently experiencing a surge in popularity. Notably, West Pharma produces similar components for these vital devices.
In light of its recent financial performance and market dynamics, West Pharmaceutical Services has now raised its full-year 2023 adjusted earnings forecast. The company anticipates earnings per share in the range of $7.95 to $8.00, up from its previous projection of $7.65 to $7.80.
The company’s financial results for the third quarter also demonstrated substantial growth. Net income for the quarter ending on September 30 reached $161.3 million, equivalent to $2.14 per share. This marked a significant improvement from the same period a year earlier when net income was $120.6 million, or $1.59 per share. On an adjusted basis, the company posted earnings of $2.16 per share, surpassing earlier estimates of $1.86.
West Pharmaceutical Services’ ability to adapt to changing market conditions and its consistent growth underscore its resilience and capacity to meet the evolving demands of the medical equipment industry.