Shire’s (SHPGY) second quarter 2011 earnings (excluding special items) of $1.33 per American Depositary Share surpassed the year-ago earnings by $0.30. Earnings were boosted by higher revenues. The Zacks Consensus Estimate was $1.25.
Quarter in Detail
Quarterly revenues increased 25% to $1,063 million, well above the Zacks Consensus Estimate of $984 million. Increased product sales helped boost revenues. The rise in product sales more than offset the decline in royalties received during the second quarter of 2011.
Product sales went up 30% to $993.3 million. Product sales were pushed up by strong performances of Adderall XR (up 83% to $146.9 million), Vyvanse (up 26% to $185.9 million), Replagal (up 46% to $119.9 million), Lialda (up 43% to $99.2 million) and Elaprase (up 28% to $127.8 million). Newly launched Intuniv and Vpriv also performed well, registering sales of $59.6 million and $63.3 million, respectively.
However, royalties declined 23% to $63.4 million. Royalty revenue mainly comprises income earned on the sale of the authorized generic version of Adderall XR, 3TC and Zeffix. During the second quarter, royalties from Impax Laboratories Inc. (IPXL) for Adderall XR and GlaxoSmithKline (GSK) for 3TC and Zeffix declined 2% and 70%, respectively.
Adjusted research & development (R&D) costs climbed 19% to $170.8 million in the reported quarter. Increased investments in R&D programs contributed to the rise. Selling, general & administrative (SG&A) expenses increased 28% to $388.5 million.
The inclusion of the operating expenses of Movetis, acquired late last year, led to the rise in SG&A expenses. Adverse foreign exchange movements also led to the rise in SG&A expenses during the quarter.
Outlook
In addition to disclosing financial results, Shire also provided an outlook for 2011. For 2011, Shire is anticipating impressive revenue and earnings growth. The company expects the year-over-year increase in 2011 adjusted R&D and SG&A expenses (combined) to be 20%. Adjusted effective tax-rate is forecasted in the range of 22%-24% for 2011.
Our Recommendation
We currently have a Neutral recommendation on Shire, which is supported by a Zacks #3 Rank (short-term Hold rating).
GLAXOSMITHKLINE (GSK): Free Stock Analysis Report
IMPAX LABORATRS (IPXL): Free Stock Analysis Report
SHIRE PLC-ADR (SHPGY): Free Stock Analysis Report
Get all Zacks Research Reports and be alerted to fast-breaking buy and sell opportunities every trading day.
Be the first to comment