UPDATE: Mylan Swings To 3Q Loss On Charges; Upgrades 2009 EPS
View
(Updates with more details, analyst comment and fresh stock price)
By Thomas Gryta
Of DOW JONES NEWSWIRES
NEW YORK -(Dow Jones)- Mylan Inc. (MYL) swung to a third-quarter loss, weighed
down by litigation and acquisition-related expenses, as its core operational
performance exceeded Wall Street expectations.
The Pittsburgh generic drug maker cut costs in the quarter and cited higher
volumes, market growth, and new product launches for its growth, prompting it to
again boost its full-year earnings projections.
Mylan shares recently rose 4.5% to $16.48 in early trading and have more than
doubled in the past year.
"We view Mylan's strong 3Q results as a continued indication of the company's
improving underlying profitability," said JPMorgan analyst Chris Schott in a
note to analysts.
He noted the results were impressive as they didn't include a substantial
contribution from a generic version of Abbott Laboratories' (ABT) anti-epilepsy
drug Depakote ER. Mylan had 180-day exclusivity to sell the generic and launched
Feb. 2.
Looking forward, the company now sees 2009 earnings, excluding items, of $1.24
to $1.28 a share, well above the current analyst view of $1.17 a share,
according to Thomson Reuters.
Mylan has steadily increased its earnings guidance throughout the year - in
February it projected 90 cents to $1.10 a share - and last projected $1.13 to $
1.20.
Wall Street has been eager to get more information on 2010 guidance, and
Mylan's Chairman and Chief Executive Robert Coury said in a statement that "we
are confident that this momentum will continue into 2010 and enable us to once
again deliver the revenue and earnings performance growth that we envision."
In the three months ended Sept. 30, Mylan swung to a loss of $40 million, or
13 cents a share, from year-earlier profit of $182.4 million, or 47 cents a
share. The latest quarter includes acquisition-related expenses and litigation
charge including a settlement related to allegations it underpaid rebates to
Medicaid.
Excluding items, earnings were 32 cents a share, well above analyst
expectations of 27 cents a share.
Revenue dropped 24% to $1.26 billion, but that also beat Street expectations
of $1.23 billion.
The top-line drop came from a 2008 revenue gain of $455 million from selling
of product rights to hypertension drug Bystolic, which Mylan co-developed with
Forest Laboratories Inc. (FRX). Excluding this gain, total revenue rose by $62.2
million, or 5.2%, over the year-ago period.
Excluding foreign-exchange impacts, revenue excluding the gain rose 9%.
Generics revenue rose 3.7% to $1.12 billion, with North America seeing a 9.2%
increase to $502.5 million.
Interest expense in the quarter dropped to $77 million from $93.5 million a
year ago, as it cut its debt and overall interest rates. The company is carrying
$5.1 billion in long-term debt on its balance sheet, mainly from the $6.7
billion purchase of Merck KGaA's (MRK.XE) generics business in 2007.
Last month, Standard & Poor's Ratings Services raised Mylan's ratings closer
to investment grade, citing the company's successful integration of those
operations and a view that increasing cash flows will be used to repay debt.
-By Thomas Gryta, Dow Jones Newswires; 212-416-2169; thomas.gryta@dowjones.com
(END) Dow Jones Newswires
10-29-091001ET
Copyright (c) 2009 Dow Jones & Company, Inc.
|