) second quarter 2013 earnings (excluding special items) of 68
cents per share surpassed the Zacks Consensus Estimate by a
penny. Earnings increased 13% from the year-ago quarter. Adjusted
earnings for second quarter 2013 were at the high end of the
guidance range of 66-68 cents provided by the company.
The year-over-year rise in earnings was primarily attributable to
higher revenues despite the negative impact of foreign currency
movements. On a reported basis (including special items), second
quarter 2013 earnings climbed 39% to 46 cents per share.
Revenues climbed 1% to $1.70 billion, but were short of the Zacks
Consensus Estimate of $1.74 billion. Foreign exchange movements
hurt revenues by 1%. Recently, another generic player,
Dr. Reddy's Laboratories
), too had reported lower-than-expected revenues.
Mylan reports revenues from 2 segments: Generics and Specialty.
Generic third-party net sales, derived from sales in North
America, Europe, the Middle East & Africa (EMEA) and
Asia-Pacific, declined marginally to $1.45 billion.
Segmental third-party net sales were disappointing in North
America. Third-party net sales in North American markets declined
14.3% to $717.6 million in the second quarter of 2013. The
decline was mainly attributable to the below par showing of new
products during the second quarter of 2013.
The products contributed $91 million to third-party net sales
from the region in the second quarter of 2013 as against $240
million a year ago. We remind investors that Mylan's segmental
revenues in the second quarter of 2012 benefited from the
revenues of its generic version of
) Lexapro (depression). Mylan launched its generic version of
Lexapro in early 2012.
Third-party net sales from the EMEA market improved 14.9% to
$375.5 million. Strong performance in France boosted EMEA
Third party net sales in the Asia-Pacific market increased
16.2% to $357.4 million on the back of strong sales in the Indian
market. Foreign currency movements, however, adversely impacted
revenues from the region. Excluding the impact of foreign
currency movements, segmental sales climbed 24% in the second
quarter of 2013.
Third-party net sales in the Specialty segment increased 14.7% to
$236.9 million. Specialty segment sales were driven by the strong
performance of its flagship product - EpiPen auto-injector - for
severe allergic reactions.
Adjusted gross margins were flat at 49%. Margins were positively
impacted by new product launches coupled with increased sales of
EpiPen. The positive impact was cancelled by the pricing pressure
in the Generic segment, resulting in flat gross margin.
Adjusted operating expenses declined marginally to $420.3 million
during the reported quarter.
Mylan expects adjusted earnings for the third quarter of 2013 in
the range of 77 cents to 79 cents. The Zacks Consensus Estimate
for the third quarter is 87 cents. Adjusted earnings in the final
quarter of 2013 are expected to be slightly higher than the third
Due to weaknesses in the Indian and Japanese currencies versus
the dollar, Mylan now expects revenues for 2013 at the low end of
the previously forecasted range of $7.0-$7.4 billion. The current
Zacks Consensus Estimate hints at revenues of $7.1 billion for
Within the Generics division, sales in the North American
market are expected to grow in single digits. Sales in the EMEA
and APAC regions are projected to grow in the mid-to-high teens
for 2013. Sales in the Specialty segment are forecasted to grow
by approximately 20% or more in 2013.
The company still expects adjusted earnings for 2013 in the
range of $2.75-$2.95 per share. The pre-earnings Zacks Consensus
Estimate is $2.87 per share.
ACTAVIS INC (ACT): Free Stock Analysis Report
FOREST LABS A (FRX): Free Stock Analysis
MYLAN INC (MYL): Free Stock Analysis Report
DOCTOR REDDYS (RDY): Free Stock Analysis
To read this article on Zacks.com click here.
Mylan expects revenues in 2014 to increase 12% over 2013 levels.
Adjusted earnings in 2014 are expected to climb 19% from the
mid-point of the projected range for 2013. Adjusted earnings for
2018 are still expected to be at least $6.00 per share.
Mylan currently carries a Zacks Rank #3 (Hold). Companies such as
) appear to be more attractive in the generic space with a Zacks
Rank #2 (Buy).