Shares of Mylan (MYL) climbed over 8% to close the trading session on Oct 3 at $50.23 following the improved earnings per share outlook issued by the company for the third quarter (results will be reported on Oct 30, after the closing bell) as well as full year 2014.
Products Launches Result in Q3 Guidance Lift
Mylan, one of the largest generic players across the globe, now expects to record earnings per share (on an adjusted basis) in the band of $1.12 to $1.16 in the third quarter of 2014 (old guidance: 90 cents to 95 cents). The Zacks Consensus for the third quarter has also been revised upwards from 93 cents to $1.14 per share.
Mylan raised its earnings outlook for the to-be-reported quarter primarily due to better-than-expected operational growth in the quarter which ended on Sep 30, 2014. Mylan said that the performance in the quarter was boosted by a string of product approvals and their subsequent launches in the U.S.
Moreover, the fresh guidance for the quarter has been boosted to the tune of 14 cents thanks to the generic player’s agreement with India’s Strides Arcolab Limited. We note that in Dec 2013, Mylan had completed the acquisition of Agila Specialties Private Limited, the injectable drugs division of Strides Arcolab, for $1.6 billion in cash.
Full-Year Guidance Hiked
We remind investors that while releasing its second quarter results in August this year, Mylan had stated that it expects the fourth quarter of 2014 to be its strongest. Buoyed by the better-than-expected operational performance in the third quarter, the company lifted its adjusted earnings per share outlook for 2014 as well.
The company now projects annual earnings in the band of $3.44 to $3.54 per share (old guidance: $3.25 to $3.45). The revised projection includes launches of the generic versions of Teva Pharmaceutical Industries Limited’s (TEVA) multiple sclerosis drug Copaxone and Endo International’s (ENDP) pain drug Lidoderm in the final quarter of the year.The Zacks Consensus for 2014 has also been revised upwards by 22 cents and currently stands at $3.49 per share.
Is Mylan up for Sale?
Rumors were afloat last week of a merger between Mylan and Teva. We keenly await Mylan’s third-quarter conference call on Oct 30 for the confirmation of the same.
Mylan carries a Zacks Rank #3 (Hold). A better-ranked stock in the health care space is Mallinckrodt (MNK) which sports a Zacks Rank #1 (Strong Buy).
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