West Pharmaceutical Services, Inc. WST delivered adjusted earnings per share (EPS) of $1.82 in the fourth quarter of 2024, down by a penny year over year. The figure topped the Zacks Consensus Estimate by 4%.

Find the latest EPS estimates and surprises on Zacks Earnings Calendar.

The adjustments include expenses related to amortization of acquisition-related intangible assets, among others.

GAAP EPS for the quarter was $1.78, reflecting a decline of 2.7% from the year-ago figure.

Full-year 2024 EPS was $6.75, down 16.5% from the comparable 2023 period. The metric surpassed the Zacks Consensus Estimate by 1.2%.

WST’s Revenues in Detail

West Pharmaceutical registered revenues of $748.8 million in the fourth quarter, up 2.3% year over year. The figure surpassed the Zacks Consensus Estimate by 1.3%.

Organic net sales, which excludes the impact of acquisitions and/or divestitures, were $756 million during the fourth quarter (up 3.3% year over year).

Robust performances by the Proprietary Products segment drove the top-line improvement.

Full-year 2024 revenues were $2.89 billion, reflecting a 1.9% decrease from the comparable 2023 period. However, the metric surpassed the Zacks Consensus Estimate by 0.3%.

Shares of this company lost nearly 20.9% in today’s pre-market trading.

West Pharmaceutical’s Segment Details

WST’s operations consist of two segments — Proprietary Products and Contract-Manufactured Products.

In the quarter under review, Proprietary Products reported worldwide revenues of $613.9 million, up 3.4% from the year-ago quarter on a reported basis. This compares to Zacks Consensus Estimate of fourth-quarter segmental revenues of $603.1 million.

On an organic basis, revenues were $620.4 million, up 4.5% year over year.

The segment’s High-Value Products (HVP), representing 74% of segment net sales in the period, was driven by robust customer demand for self-injection device platforms. The Biologics market unit recorded high-single-digit organic net sales growth, driven by an increase in sales of self-injection device platforms, offset by lower sales of NovaPure products. The Pharma market unit saw mid-single-digit organic net sales growth, driven by an increase in sales of Westar products and Administrative Systems. The Generics market unit had a mid-single-digit decline in organic net sales, driven by lower volumes of FluroTec products.

Revenues in the Contract-Manufactured Products segment totaled $134.9 million, down 2.5% year over year on a reported basis. This compares to Zacks Consensus Estimate of fourth-quarter segmental revenues of $141.7 million.

Organic revenues were $135.6 million, down 1.9% year over year.

The segment’s performance was impacted by a continued decrease in sales of healthcare diagnostic devices, partially offset by growth in self-injection devices for obesity and diabetes.

WST’s Margin Analysis

In the quarter under review, West Pharmaceutical’s gross profit decreased 1.7% year over year to $273.6 million. The gross margin contracted 147 basis points (bps) to 36.5%. We had projected 35.9% of gross margin in the fourth quarter of 2024.

Selling, general and administrative expenses decreased 5.2% year over year to $85.3 million. Research and development expenses increased 0.5% year over year to $18.5 million. Adjusted operating expenses of $103.8 million declined 4.2% year over year.

Adjusted operating profit totaled $169.8 million, reflecting a 1.7% decline from the year-ago quarter. The adjusted operating margin in the fourth quarter contracted 52 bps to 22.7%.

West Pharmaceutical’s Financial Position

WST exited 2024 with cash and cash equivalents of $484.6 million compared with $853.9 million at 2023-end. Total debt at the end of 2024 was $202.6 million compared with $206.8 million at 2023-end.

Cumulative net cash provided by continuing operating activities at the end of 2024 was $653.4 million compared with $776.5 million a year ago.

Meanwhile, West Pharmaceutical has a consistent dividend-paying history, with its five-year annualized dividend growth being 5.70%.

WST’s Guidance

West Pharmaceutical has initiated its financial outlook for 2025.

WST projects its full-year revenues between $2.875 billion and $2.905 billion. The Zacks Consensus Estimate is pegged at $3.03 billion.

For 2025, organic net sales growth is expected to be 2-3% from the comparable 2024 period.

For the full year, adjusted EPS is anticipated to be in the range of $6.00-$6.20. The Zacks Consensus Estimate is pegged at $7.44.

Our Take

West Pharmaceutical exited the fourth of quarter 2024 with better-than-expected results. Solid top-line results, along with improvements in organic revenues, was impressive. Robust performance by the Proprietary Products segment was encouraging. Strength in HVP and robust growth in the Biologics and Pharma market units during the reported quarter was also promising.

However, WST’s dismal bottom-line performances and lower revenues from the Contract-Manufactured Products segment were disappointing. The decline in the Generics market unit was also discouraging. The contraction of both margins does not bode well.

West Pharmaceutical’s Zacks Rank and Key Picks

WST currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the broader medical space that have announced quarterly results are Cardinal Health, Inc. CAH, ResMed Inc. RMD and Boston Scientific Corporation BSX.

Cardinal Health, carrying a Zacks Rank of 2 (Buy), reported second-quarter fiscal 2025 adjusted EPS of $1.93, beating the Zacks Consensus Estimate by 10.3%. Revenues of $55.26 billion outpaced the consensus mark by 0.7%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Cardinal Health has a long-term estimated growth rate of 10.7%. CAH’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 9.6%.

ResMed reported second-quarter fiscal 2025 adjusted EPS of $2.43, beating the Zacks Consensus Estimate by 5.7%. Revenues of $1.28 billion surpassed the Zacks Consensus Estimate by 1.6%. It currently carries a Zacks Rank #2.

ResMed has a long-term estimated growth rate of 16%. RMD’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 6.9%.

Boston Scientific reported fourth-quarter 2024 adjusted EPS of 70 cents, beating the Zacks Consensus Estimate by 7.7%. Revenues of $4.56 billion surpassed the Zacks Consensus Estimate by 3.5%. It currently sports a Zacks Rank #1.

Boston Scientific has a long-term estimated growth rate of 13.3%. BSX’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 8.3%.

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