West Pharmaceutical Services stock catapulted Thursday, retaking its 200-day line, after the medical player blew second-quarter expectations out of the water.
The Philadelphia-based company makes delivery systems for injectable drugs. During the three months ended June 30, West Pharma earned $1.84 per share, minus some items, on $766.5 million in sales.
Earnings surged 21% to top forecasts for $1.51. Sales also beat projections for $726.1 million, according to FactSet, and grew 9.2%. Organically, sales climbed 6.8%.
"We expect a key focus on the call to be whether the quarter benefitted from any tariff-related or other pull-forward, or whether the (unexpectedly) broad-based strong growth is a signal that destocking has finished," William Blair analyst Matt Larew said in a report.
West Pharmaceutical stock rocketed 22.8%, closing at 279.10. The move pushed shares above their 200-day line for the first time since February.
West Pharmaceutical's High-Value Products
Larew credited growth in West Pharma's high-value products segment for the big beat. West includes proprietary products, including stoppers, seals plungers as well as self-injectors, as its high-value products. Those accounted for 47% of total sales and grew 11.3%.
Standard products generated 21% of total revenue and sales edged 0.4% higher.
High-value products delivery devices, 13% of total sales, shot 30% higher.
The company raised its outlook for the year and now expects $3.04 billion to $3.06 billion. At the midpoint, that's an increase of $90 million from West Pharma's prior guidance. The guidance includes a $59 million tailwind vs. a $5 million headwind previously.
Organically, West Pharmaceutical expects sales to rise 3% to 3.75%.
Adjusted earnings are also projected to come in at $6.67 to $6.85 per share, vs. previous guidance for $6.15 to $6.35 a share. That assumes a 27-cent tailwind thanks to exchange rates.
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