Lannett Company, Inc. (LCI) has outpaced the Zacks Consensus Estimate consecutively for the last eight quarters. The latest earnings beat came in the second quarter of fiscal 2014 (ended Dec 31, 2013). Shares of the company have been positively impacted by strong second quarter results which included a positive earnings surprise of 17.95%. Buoyed by the strong earnings results and an upbeat guidance, the stock attained a Zacks #1 Rank (Strong Buy) on Feb 8.
The Second Quarter in Details
Lannett reported earnings of 46 cents in the second quarter of fiscal 2014, 7 cents above the Zacks Consensus Estimate and 36 cents above the year-ago earnings. Higher revenues contributed to the massive growth in earnings.
Lannett’s revenues in the second quarter of fiscal 2014 jumped 84% year over year to $67.3 million. Revenues in the reported quarter were above the Zacks Consensus Estimate of $65 million. Net sales during the quarter were up primarily due to increased sales in the thyroid deficiency (up 81.3% to $26.2 million), cardiovascular (up 133% to $16.9 million) and pain management (up 60.2% to $6.8 million) medical indications. Higher prices and a favorable product mix contributed to the strong results in the second quarter of fiscal 2014.
Lannett’s revenues during the second quarter of fiscal 2014 consisted of sales from thyroid deficiency, cardiovascular, pain management, antibiotic, gallstone, obesity, migraine, gout and glaucoma medical indications among others.
Lannett reported research and development (R&D) expenses of $5.8 million during the quarter, up 62% year over year. The rise was primarily attributable to increased costs for third-party laboratory services. Selling, general and administrative (SG&A) expenses in the quarter jumped to $9.9 million from $5.2 million in the year-ago quarter due to compensation-related expenses.
Rosy Fiscal 2014 Projection
Apart from announcing strong second quarter results, Lannett upped its revenue guidance for fiscal 2014. The company now expects net sales in the range of $275–$285 million, reflecting an increase of 12% from the earlier projected range of $245–$255 million. The Zacks Consensus Estimate currently hints at revenues of $231 million. Gross margin is now projected in the range of 61%–63% (previous guidance: 57%–-59%).
The company has made a modest increase to its projections for R&D and SG&A costs. R&D expenses in fiscal 2014 are now expected in the range of $30–$32 million (previous guidance: $27–$29 million). SG&A costs are now projected in the range of $39–$41 million previous guidance: $35–$37 million).
Other players which look attractive at current levels include Dr. Reddy's Laboratories Ltd. (RDY), Forest Laboratories Inc. (FRX) and Salix Pharmaceuticals Ltd. (SLXP). All these stocks carry the same Zacks Rank as Lannett Company.
Be the first to comment