Generic drug maker Mylan, Inc. (MYL), reported Wednesday a decline in second-quarter profit, despite an 8% rise in sales, on higher costs as well as litigation expenses. Adjusted earnings for the quarter came in line with Street view, while revenues surpassed expectations. Looking ahead, the company revised its forecast for fiscal year 2010.
The Canonsburg, Pennsylvania-based company reported net income for the second quarter of $51.5 million or $0.16 per share, compared to $58.0 million or $0.19 per share in the year-ago quarter.
Results in both periods included amortization for purchase accounting, litigation settlements, interest accretion of convertible debt discount as well as certain restructuring, severance and employee benefit related charges.
Excluding the items, adjusted net income for the quarter was $163.5 million or $0.37 per share, compared to $147.4 million or $0.32 per share for the same prior year period.
On average, sixteen analysts polled by Thomson Reuters expected the company to earn $0.37 per share for the quarter. Analysts estimates typically exclude special items.
Total revenues for the quarter increased 8% to $1.37 billion from $1.27 billion in the prior-year quarter. Sixteen analysts had a revenue consensus of $1.34 billion for the quarter.
Among peers, the world's largest generic drug maker Teva Pharmaceutical Industries Ltd., (TEVA) yesterday reported a higher profit in its second quarter, reflecting strong North American and Copaxone sales. Second-quarter net income attributable to Teva was $797 million or $0.88 per share, with revenues of $3.80 billion.
Mylan's second quarter total third party revenues include both net revenues and other revenues from third parties. Other revenues for the quarter was $12.0 million, up from $11.2 million in the similar quarter of 2009.
Generic revenues increased to $1.24 billion from $1.15 billion reported last year. Total revenues from North America rose to $588.8 million from last year's $525.5 million.
Total revenues from the North America, Europe, the Middle East and Africa region declined to $378.6 million from $392.7 million last year. However, foreign currency translation had a negative impact on sales for the current quarter, principally reflecting the weakening of the Euro against the U.S. Dollar.
Asia Pacific revenues increased 22.8% to $282.3 million from $215.9 million for the comparable prior year period.
In the Specialty segment, consisting of Mylan's Dey business, revenues rose 1.9% to $124.0 million from $121.7 million in the prior year, owing to higher sales of Dey's EpiPen Auto-Injector.
Second-quarter gross margins declined to 39.6% from 41.7%, owing to lower revenues from divalproex ER, which was launched during the three months ended March 31, 2009, and contributed high margins during the period of exclusivity.
Cost of sales increased to $826.69 million from $739.21 million reported last year. Total operating expenses increased to $347.26 million from $353.05 million reported last year.
Recently on July 14, Mylan agreed to buy Bioniche Pharma Holdings Ltd., a privately held, global injectable pharmaceutical firm for $550 million in cash. The acquisition is expected to pave the way for Mylan's entry into the North American injectables market, and also create future growth opportunities.
Looking ahead to fiscal year 2010, the company now expects earnings to be in the range of $1.55 - $1.65 per share, compared to the prior range of $1.50 - $1.70 per share. Total revenue is now expected to be in the range of $5.40 billion - $5.60 billion, compared to previous estimates of $5.45 billion - $5.75 billion.
Analysts currently expect the company to report earnings of $1.62 per share on revenues of $5.50 billion for fiscal year 2010.
MYL closed Wednesday's regular trading at $17.91, down $0.18 or $1.00%, on a volume of 5.41 million shares. However, the stock gained $0.08 or 0.45% in after hours. In the past 52 weeks, the stock traded between $11.97 and $13.63, on a 3-month average volume of 8.84 million shares.
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