Mallinckrodt Public Limited Company reported first-quarter 2017 results wherein both sales and earnings beat expectations.
The company reported adjusted earnings of $1.68 per share in the reported quarter, beating the Zacks Consensus Estimate of $1.63. Earnings were however down from the year-ago figure of $1.81. Higher sales and profits in the Specialty Brands segment offset the weakness in Specialty Generics.
Net sales in the quarter came in at $810.9 million, down 0.6% year over year but beat the Zacks Consensus Estimate of $787.5 million.
Mallinckrodt’s share price declined 6.4% in the year so far, compared with the Zacks classified Medical-Generics Drugs industry’s fall of 2.1%.
Quarter in Detail
The company reports results under two segments – Specialty Brands and Specialty Generics.
Sales at the Specialty Brands segment were $557.2 million, up 4.1% from the year-ago quarter. Acthar, Mallinckrodt’s largest product, garnered sales of $271.8 million, up 9.4%. Ofirmev sales grew 3.2% year over year to $73.4 million. Inomax, its second-largest product, generated sales of $128.4 million, up 11.2%.
Sales of the Therakos immunology platform were $51.2 million, up 2%. During the quarter the company resolved the third-party manufacturer production issue, incurring minimal impact from the supply imbalance.
As expected, weakness in the Specialty Generics segment continues. The segment recorded sales of $238.6 million, down 9.8% but better than management’s expectations due to the performance of methylphenidate HCl extended-release tablets, USP CII, and certain one-time orders within the segment's other products category.
Adjusted selling, general and administrative (SG&A) expenses in the reported quarter increased 12.6% to $237.4 million. Meanwhile, research and development (R&D) expense was up 7.1%.
During the first quarter, the company repurchased 5.6 million ordinary shares for $275.6 million under its share repurchase programs, bringing total shares repurchased since January 2015 under the company's authorized programs to 18.7 million, or approximately 16.1% of diluted shares outstanding.
Our Take
Mallinckrodt’s first-quarter results were positive as the company beat on earnings and sales were driven by continued growth in the Specialty Brands segment. However, weaknesses in the generics segment persist. Acthar sales continue to be strong on the back of increased formulary positions and access for appropriate patients in both the commercial and public environments.
The company is currently streamlining its business. The company’s move aims to focus better on its specialty pharmaceutical business after having sold its Nuclear Imaging business. The company also sold its Intrathecal Therapy business. On the other hand, the acquisition of hemostasis drugs – Recothrom Thrombin topical (recombinant), PreveLeak and Raplixa (fibrin sealant) – from The Medicines Co. has strengthened its growing hospital portfolio.
Zacks Rank & Key Pick
Mallinckrodt currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the health care sector are Galena Biopharma, Inc. and VIVUS, Inc. . Each of these stocks sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Galena’s loss per share estimates narrowed from $2.03 to 58 cents for 2017, over the last 60 days. The company posted positive earnings surprises in two of the four trailing quarters with an average beat of 53.83%.
VIVUS’s loss per share estimates narrowed from 50 cents to 39 cents for 2017, over the last 30 days. The company posted positive earnings surprises in all of the four trailing quarters with an average beat of 233.69%.
Zacks' 2017 IPO Watch List
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Mallinckrodt Earnings, Revenues Beat Estimates in Q1
Mallinckrodt Public Limited Company reported first-quarter 2017 results wherein both sales and earnings beat expectations.
The company reported adjusted earnings of $1.68 per share in the reported quarter, beating the Zacks Consensus Estimate of $1.63. Earnings were however down from the year-ago figure of $1.81. Higher sales and profits in the Specialty Brands segment offset the weakness in Specialty Generics.
Net sales in the quarter came in at $810.9 million, down 0.6% year over year but beat the Zacks Consensus Estimate of $787.5 million.
Mallinckrodt’s share price declined 6.4% in the year so far, compared with the Zacks classified Medical-Generics Drugs industry’s fall of 2.1%.
Quarter in Detail
The company reports results under two segments – Specialty Brands and Specialty Generics.
Sales at the Specialty Brands segment were $557.2 million, up 4.1% from the year-ago quarter. Acthar, Mallinckrodt’s largest product, garnered sales of $271.8 million, up 9.4%. Ofirmev sales grew 3.2% year over year to $73.4 million. Inomax, its second-largest product, generated sales of $128.4 million, up 11.2%.
Sales of the Therakos immunology platform were $51.2 million, up 2%. During the quarter the company resolved the third-party manufacturer production issue, incurring minimal impact from the supply imbalance.
As expected, weakness in the Specialty Generics segment continues. The segment recorded sales of $238.6 million, down 9.8% but better than management’s expectations due to the performance of methylphenidate HCl extended-release tablets, USP CII, and certain one-time orders within the segment's other products category.
Adjusted selling, general and administrative (SG&A) expenses in the reported quarter increased 12.6% to $237.4 million. Meanwhile, research and development (R&D) expense was up 7.1%.
During the first quarter, the company repurchased 5.6 million ordinary shares for $275.6 million under its share repurchase programs, bringing total shares repurchased since January 2015 under the company's authorized programs to 18.7 million, or approximately 16.1% of diluted shares outstanding.
Mallinckrodt PLC Price and Consensus
Mallinckrodt PLC Price and Consensus | Mallinckrodt PLC Quote
Our Take
Mallinckrodt’s first-quarter results were positive as the company beat on earnings and sales were driven by continued growth in the Specialty Brands segment. However, weaknesses in the generics segment persist. Acthar sales continue to be strong on the back of increased formulary positions and access for appropriate patients in both the commercial and public environments.
The company is currently streamlining its business. The company’s move aims to focus better on its specialty pharmaceutical business after having sold its Nuclear Imaging business. The company also sold its Intrathecal Therapy business. On the other hand, the acquisition of hemostasis drugs – Recothrom Thrombin topical (recombinant), PreveLeak and Raplixa (fibrin sealant) – from The Medicines Co. has strengthened its growing hospital portfolio.
Zacks Rank & Key Pick
Mallinckrodt currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the health care sector are Galena Biopharma, Inc. and VIVUS, Inc. . Each of these stocks sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Galena’s loss per share estimates narrowed from $2.03 to 58 cents for 2017, over the last 60 days. The company posted positive earnings surprises in two of the four trailing quarters with an average beat of 53.83%.
VIVUS’s loss per share estimates narrowed from 50 cents to 39 cents for 2017, over the last 30 days. The company posted positive earnings surprises in all of the four trailing quarters with an average beat of 233.69%.
Zacks' 2017 IPO Watch List
Before looking into the stocks mentioned above, you may want to get a head start on potential tech IPOs that are popping up on Zacks' radar. Imagine being in the first wave of investors to jump on a company with almost unlimited growth potential? This Special Report gives you the current scoop on 5 that may go public at any time.
One has driven from 0 to a $68 billion valuation in 8 years. Four others are a little less obvious but already show jaw-dropping growth. Download this IPO Watch List today for free >>