Endo Health Solutions'
) first quarter 2013 earnings (excluding special items) of $1.09
per share beat the Zacks Consensus Estimate by a penny and
increased 25% from the year-ago period. Earnings in the first
quarter of 2013 were aided by lower costs.
Revenues came in at $708.5 million in the first quarter of 2013,
up 3%. Revenues were well short of the Zacks Consensus Estimate
of $744 million.
The First Quarter in Detail
Revenues were hurt by lower sales of Endo Health's painkillers,
Lidoderm (down 11%) and Opana ER (down 31%). Reduced sales of the
drugs were primarily responsible for 2% decline in the quarterly
sales of the Endo Pharmaceuticals division (formerly branded
pharmaceuticals) to $357.6 million.
We remind investors that in Aug 2012, the US Food and Drug
Administration cleared Actavis, Inc.'s (ACT) generic version of
Lidoderm. However, Actavis' agreement with Endo Health prohibits
the former from selling the drug prior to Sep 15, 2013.
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Sales of oncology drugs Valstar and Vantas dropped 13% and 1% to
$5.4 million and $3.9 million, respectively, in the reported
Sales in Endo Health's Qualitest (formerly generics) segment
climbed 23% year over year to $178.3 million in the first quarter
of 2013. Favorable pricing coupled with increased demand for the
generic drugs contributed to the increase.
Revenues from the American Medical Systems segment (formerly
devices) came in at $123 million in the reported quarter, down
6%. Segmental sales were hurt by reduced sales in the US. The
segment has the following sub-groups: men's health (flat year
over year), women's health (down 16%) and benign prostatic
hyperplasia therapy (down 8%). Revenues from the HealthTronics
segment (formerly services) came in at $50 million, down 3%.
Adjusted operating expenses declined 11.3% to approximately $250
million. The decline was attributable to Endo Health's prudent
2013 View Backed
Endo Health maintained its 2013 guidance, issued in January. The
US-based diversified healthcare company continues to expect
adjusted earnings per share for 2013 in the range of $4.40-$4.70
per share. The company still expects to end 2013 with revenues in
the range of $2.80-$2.95 billion. The Zacks Consensus Estimate
for 2013 pegs earnings at $4.51 per share on revenues of $2.92
Endo Health currently carries a Zacks Rank #2 (Buy).
Cubist Pharmaceuticals, Inc.
) appears to be equally attractive with a Zacks Rank #2.
) seems to be more favorably placed with a Zacks Rank #1 (Strong