West Pharmaceutical Services, Inc. (NYSE: WST) today announced its financial results for the first-quarter 2024 and updated full-year 2024 financial guidance.
First-Quarter 2024 Summary (comparisons to prior-year period)
- Net sales of $695.4 million declined 3.0%; organic net sales also declined by 3.0%.
- Reported-diluted EPS of $1.55 declined by 16.2%.
- Adjusted-diluted EPS of $1.56 declined by 21.2%.
- The Company is reaffirming full-year 2024 net sales guidance in a range of $3.000 billion to $3.025 billion.
- The Company is raising full-year 2024 adjusted-diluted EPS guidance to a new range of $7.63 to $7.88, compared to a prior range of $7.50 to $7.75.
- The Company also announced that its Board of Directors has approved a third-quarter 2024 dividend of $0.20 per share. The dividend will be paid on August 7, 2024, to shareholders of record as of July 31, 2024.
“Adjusted-diluted EPS” and “organic sales growth” are Non-U.S. GAAP measurements. See discussion under the heading “Non-U.S. GAAP Financial Measures” in this release.
“We had a solid start to the year and our full-year 2024 financial outlook remains unchanged,” said Eric M. Green, President, Chief Executive Officer and Chair of the Board of Directors. “We are actively managing the timing of inventory decisions by some of our customers, and our recent order trends reinforce our prior outlook for stronger organic sales growth in the second half of the year. As we navigate the near-term headwinds, we are controlling our costs while making strategic investments in new manufacturing capacity in both our Contract Manufacturing segment and our Proprietary Products segment, which positions us well for future organic sales growth.”
Proprietary Products Segment
Net sales declined by 4.0% to $559.5 million. Organic sales declined by 4.0% with currency translation positively impacting sales growth by 50 basis points. High-value products (components and devices) represented 72% of segment sales and an organic sales decline of low-single digits.
The Biologics market unit had low-single digit organic sales growth. The Pharma market unit had a high-single digit organic decline in sales, and the Generics market unit declined double digits. Proprietary Products segment growth was led by NovaPure®, self-injection device platforms and Daikyo Crystal Zenith® components, which were more than offset by declines in FluroTec®, Westar® and standard components.
Contract-Manufactured Products Segment
Net sales increased by 1.8% to $135.9 million. Organic sales growth was 1.3% with currency translation positively impacting sales growth by 50 basis points. Segment performance was led by growth in sales of components associated with diagnostic devices.
Financial Highlights
Operating cash flow was $118.2 million, a decrease of 14.4%. Capital expenditures in the quarter were $90.6 million. Free cash flow (operating cash flow minus capital expenditures) was $27.6 million, a decrease of 50.7%.
During the quarter, the Company repurchased 729,679 shares for $267.0 million at an average share price of $365.87 under its share repurchase program.
Full-Year 2024 Financial Guidance
- The Company is reaffirming full-year 2024 financial guidance of net sales in a range of $3.000 billion to $3.025 billion.
- Organic net sales growth is expected to be approximately 2% to 3%.
- Net sales guidance includes an estimated full-year 2024 headwind of approximately $8.0 million based on current foreign currency exchange rates.
- The Company is raising full-year 2024 financial guidance of adjusted-diluted EPS to a new range of $7.63 to $7.88, compared to a prior range of $7.50 to $7.75.
- Full-year adjusted-diluted EPS guidance range includes an estimated headwind of approximately $0.04 based on current foreign currency exchange rates, which is an increase from prior guidance of $0.02.
- The updated guidance also includes EPS of $0.15 associated with first-quarter 2024 tax benefits from stock-based compensation.
- For the remaining quarters of the year, our EPS guidance range assumes a tax rate of 22.5% and does not include potential tax benefits from stock-based compensation. Any tax benefits associated with stock-based compensation beyond those recorded in the first-quarter 2024 would provide a positive adjustment to our full-year adjusted-diluted EPS guidance.
- Full-year 2024 capital spending guidance is unchanged and is expected to be $350 million.
