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Mylan's (MYL) Q1 Earnings Beat Estimates, Revenues Miss

Mylan N.V. MYL reported adjusted earnings of 82 cents per share in the first quarter of 2019, which beat the Zacks Consensus Estimate of 79 cents but declined from 96 cents in the year-ago quarter.

However, first-quarter revenues of $2.50 billion missed the Zacks Consensus Estimate of $2.69 billion and declined 7% from the prior-year quarter.

Shares of the company declined 5.7% in pre-market trading following the earnings release. However, Mylan’s stock has gained 3.1% year to date compared with the industry’s growth of 7.1%.


Quarter in Detail

The company posts results in three segments on a geographic basis — North America, Europe and Rest of World.

North America segment’s net sales came in at $922.9 million, down 6% year over year. This decline is primarily attributable to lower volumes of existing products due to changes in the competitive environment and remediation activities at the Morgantown plant. Pricing also declined from the year-ago quarter.

Net sales in the Europe segment were $895.3 million, down 14% due to unfavorable impact of foreign currency translation, lower volumes of existing products driven by the timing of purchases of the company’s products by customers and temporary business disruptions due to the adoption of serialization across Europe, and pricing.

Rest of World segment’s net sales of $642.4 million were up 3%, driven by new product sales and higher volumes of existing products.

Adjusted gross margin of 54% increased from 53% in the year-ago quarter.

2019 Guidance

The company reaffirmed its guidance for 2019. Revenues are projected between $11.5 billion and $12.5 billion. The Zacks Consensus Estimate is $11.98 billion.

The company anticipates adjusted EPS around $3.80-$4.80. The Zacks Consensus Estimate is $4.38.

Our Take

Mylan’s first-quarter earnings beat estimates but sales missed the same. While the generics market in large has been experiencing a slowdown, the company itself proactively discontinued a number of products along with transferring some to other sites.

These have led to a temporary disruption in supply of certain products and reduced volumes in North America generic sales, including the EpiPen auto injector. We note that rival Teva Pharmaceutical TEVA has already won the FDA approval for the first generic version of Mylan’s EpiPen and EpiPen Jr, which, in turn, will impact sales further.

Mylan N.V. Price, Consensus and EPS Surprise

Mylan N.V. Price, Consensus and EPS Surprise | Mylan N.V. Quote

Zacks Rank & Stocks to Consider

Mylan currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks are Fibrocell Science Inc. FCSC and Ligand Pharmaceuticals Inc. LGND. Both the stocks carry a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Ligand’s earnings per share estimates have increased from $28.72 to $29.14 for 2019 and from 24 cents to 69 cents for 2020 in the past 60 days. The company delivered a positive earnings surprise in three of the trailing four quarters, the average being 37.44%.

Fibrocell’s loss per share estimates have narrowed from $2.68 to $1.15 for 2019 and from $2.55 to 97 cents for 2020 in the past 60 days. The company delivered a positive earnings surprise in two of the trailing four quarters, the average being 28.30%.

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