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Mylan (MYL) to Report Q4 Earnings: What's in the Cards?

MylanMYL is scheduled to report fourth-quarter 2015 earnings results on Feb 10, after the opening bell.

The company has recorded positive earnings surprises in three of the trailing four quarters, with an average beat of 2.30%. Let's see how things are shaping up for this announcement.

Factors Driving Q4 Results

Mylan's Generics segment has been performing well over the last few quarters and is expected to keep up its performance this quarter as well. Moreover, the company has seen quite a few generic launches over the past few quarters and this quarter was no exception. The newly launched products should perform well and drive segmental growth.

However, performance at the company's Specialty segment could be weak given that the company is facing competitive market conditions for EpiPen Auto-Injector and has lowered its average net selling price.

For 2015, the company expects adjusted earnings per share at the high end of range of $4.15 to $4.35.

What Our Model Indicates

Our proven model does not conclusively show that Mylan is likely to beat on earnings this quarter. That is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), #2 (Buy) or #3 (Hold) to likely post an earnings beat. That is not the case here, as you will see below.

Zacks ESP: The Earnings ESP, which represents the difference between the Most Accurate estimate and the Zacks Consensus Estimate, is -2.40%. This is because the Most Accurate estimate stands at $1.22, while the Zacks Consensus Estimate is pegged higher at $1.25.

Zacks Rank: Although the company's Zacks Rank #2 enhances the predictive power of the ESP, the company's negative ESP makes a surprise prediction difficult.

We caution against stocks with a Zacks Rank #4 or #5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions.

Stocks that Warrant a Look

Here are a few health care stocks that you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this quarter.

Cytokinetics, Incorporated CYTK has an Earnings ESP of +6.45% and a Zacks Rank #3. The company is scheduled to release results on Feb 16.

Shire plc SHPG has an Earnings ESP of +2.47% and a Zacks Rank #3. The company is expected to release results on Feb 11.

Acorda Therapeutics, Inc. ACOR has an Earnings ESP of +150% and a Zacks Rank #2. The company is scheduled to release results on Feb 11.

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ACORDA THERAPT (ACOR): Free Stock Analysis Report

CYTOKINETCS INC (CYTK): Free Stock Analysis Report

MYLAN NV (MYL): Free Stock Analysis Report

SHIRE PLC-ADR (SHPG): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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