Mylan Inc. 's ( MYL ) third quarter 2013 earnings (excluding special items) of 82 cents per share surpassed the Zacks Consensus Estimate by 4 cents. Earnings in the third quarter of 2013 declined marginally from the year-ago quarter. Adjusted earnings for the third quarter of 2013 surpassed the guidance range of 77 cents to 79 cents per share provided by the company while releasing its second quarter results.
The year-over-year decline in earnings was primarily attributable to lower revenues due to the negative impact of foreign currency movements. On a reported basis (including special items), third quarter 2013 earnings declined 22% to 40 cents per share hurt by higher costs.
Revenues declined 2% to $1.77 billion, short of the Zacks Consensus Estimate of $1.85 billion. The decline was mainly due to negative foreign currency movements.
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 6% to $1.40 billion. Sales were hurt by adverse foreign currency movements.
Segmental third-party net sales were disappointing in North America. Third-party net sales in North American markets declined 14.2% to $706.5 million in the third quarter of 2013. The decline was mainly attributable to the below par performance of new products during the third quarter of 2013.
The products contributed $81 million to third-party net sales from the region in the third quarter of 2013 as against $258 million a year ago.
Third-party net sales from the EMEA market improved 11.1% to $361.7 million. Strong performance in Italy and France boosted EMEA revenues. Third party net sales in the Asia-Pacific market declined 2.5% to $330.6 million on the back of strong sales in the Indian market. Foreign currency movements, however, adversely impacted revenues from the region due to weaknesses in the Indian, Australian and Japanese currencies versus the dollar. Excluding the impact of foreign currency movements, segmental sales climbed 13% in the third quarter of 2013.
Third-party net sales in the Specialty segment increased 18.4% to $357.2 million. Specialty segment sales were driven by the strong performance of its flagship product - EpiPen auto-injector - for severe allergic reactions. Favorable pricing and volume aided sales of the product in the third quarter of 2013.
Adjusted gross margin during the third quarter of 2013 declined to 51% from 52% in the year-ago quarter. Margins were negatively impacted by the unfavorable pricing of Mylan's generic offerings. Adjusted operating expenses climbed 3.2% to $441.6 million during the reported quarter.
Apart from releasing its earnings results, Mylan narrowed its 2013 adjusted earnings guidance range to $2.80-$2.90 per share from the previously guided range of $2.75-$2.95 per share. The Zacks Consensus Estimate for 2013 currently stands at $2.87 per share.
Mylan stated in its press release that it expects to complete the acquisition of Agila Specialties - the injectable drugs division of India's Strides Arcolab - for $1.6 billion in cash by year end. Through this deal, Mylan intends to strengthen its presence in the high potential generic injectables market.
The guidance is inclusive of the effects of the impending transaction (4 cents per share). The projection, however, does not include the effect of the potential launch by Mylan of its generic version of Endo Health Solutions Inc. 's ( ENDP ) pain drug Lidoderm.AKORN INC (AKRX): Free Stock Analysis ReportACTELION LTD (ALIOF): Get Free ReportENDO PHARMACEUT (ENDP): Free Stock Analysis ReportMYLAN INC (MYL): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment Research
Mylan remains on track to achieve its 2014 projections of 12% revenue growth and 19% earnings growth over 2013 levels.
Mylan carries a Zacks Rank #3 (Hold). Akorn, Inc. ( AKRX ) appears to be favorably placed in the generic space with a Zacks Rank #2 (Buy). Meanwhile, Actelion Ltd. ( ALIOF ) carries a Zacks Rank #1 (Strong Buy).