Mylan MYL is set to report first-quarter 2015 results on May 5 after market closes. Last quarter, the company posted a positive earnings surprise of 0.96%. The company has delivered positive earnings surprises in three of the last four quarters with an average beat of 1.51%. Let’s see how things are shaping up for this announcement.
Specialty Segment Could Boost Sales
The company expects adjusted earnings per share to be flat in the first quarter with growth expected in the following three quarters of 2015.
The Specialty segment is expected to perform well in the quarter on the back of its flagship product – EpiPen Auto-Injector. Meanwhile, Mylan’s Generics segment has been performing well over the last few quarters and is expected to continue its run in the first quarter as well. Mylan 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, driving segmental growth.
We remain positive on Mylan’s deal with Abbott ABT. The deal is expected to be accretive to earnings by approximately 20 cents in 2015 and to increase thereafter through 2018. Mylan’s agreement to acquire certain female health care businesses of Famy Care Limited, a privately held specialty women's health care company, is also encouraging.
Mylan expects 2015 earnings per share in the range of $4.00 to $4.30 and revenues in the range of $9.7 billion to $10.1 billion.
The company has been in the news lately for its efforts to acquire Perrigo Company PRGO. Meanwhile, Teva Pharmaceutical Industries, Ltd. (TEVA) has shown interest to acquire Mylan.
Earnings Whispers?
Our proven model does not conclusively show that Mylan is likely to beat earnings estimates this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1, 2 or 3 for this to happen. This is not the case here, as you will see below.
Zacks ESP: Earnings ESP for Mylan is 0.00%. This is because both the Most Accurate estimate and the Zacks Consensus Estimate stand at 70 cents per share.
Zacks Rank: Mylan carries a Zacks Rank #3 (Hold). Though a Zacks Rank #3 increases the predictive power, an ESP of 0.00% leaves the prediction inconclusive.
We caution against stocks with a Zacks Ranks #4 and 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Stock to Consider
Here is a company you may want to consider as our model shows that it has the right combination of elements:
The Earnings ESP for Actavis ACT is +0.78% and it carries a Zacks Rank #2. The company is scheduled to release results on May 11.
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