Mylan, Inc. ( MYL - Analyst Report ) recently announced that it expects 2012 adjusted earnings in the range of $2.45 to $2.55 per share, up from the previously guided range of $2.30 to $2.50 per share. The 2012 Zacks Consensus Estimate for earnings, pegged at $2.42 per share, is 3 cents below the lower end of the new guidance range.

The company reiterated its 2012 adjusted operating cash flow guidance of $900 million to $1 billion. Capital expenditure is expected in the range of $300 million to $400 million in 2012.

The company also announced that its board of directors has approved up to $500 million for share repurchase from the open market. We are positive on this move, which will increase shareholder value.

Last week, Mylan had announced that it has launched the first generic equivalent of Mayne Pharma's Doryx (150 mg), which is marketed by Warner Chilcott ( WCRX - Analyst Report ) . The U.S. District Court for the District of New Jersey ruled against the patent infringement lawsuit by Warner Chilcott. According to IMS Health, Doryx generated U.S. sales of approximately $264.1 million for the 12 months ending December 31, 2011.

We believe that the share repurchase program, coupled with the launch of generic Doryx, influenced the company’s decision to raise earnings guidance.

Mylan had reported first quarter 2012 adjusted earnings of 52 cents per share, up 18.2% from the year-ago period. Higher revenues and gross margin expansion led to the rise in first quarter 2012 earnings.

Revenues climbed 10% to $1.59 billion, with the Generics (increased 5.2% to $1.42 billion) and Specialty (increased 53.5% to $177 million) segments reporting growth.

Our Recommendation

We are encouraged by Mylan’s geographic reach and product depth along with a robust generic product pipeline. However, we are concerned about the company’s lackluster performance in the EMEA region. Additionally, with most large branded drugs due to lose patent exclusivity within 2017-2018, we have little visibility on the growth prospects for generic companies like Mylan beyond that timeframe.

Thus, we prefer to remain on the sidelines and have a Neutral recommendation on Mylan. The stock carries a Zacks #3 Rank (Hold” rating) in the short term.