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Tale of the Tape

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Mallinckrodt (MNK) Tops on Earnings & Sales in Q4
November 29, 2016

Trades from $3

Ireland-based Mallinckrodt Public Limited Company focuses on developing treatments for autoimmune and rare diseases (including neurology, rheumatology, nephrology and pulmonology) as well as therapies for pain management.

The company develops, manufactures, markets and distributes both branded and specialty generic pharmaceuticals. The company reports in three segments: Specialty Brands, Specialty Generics and Nuclear Imaging. The company sold its contrast media and delivery systems business to Guerbet S.A. in Nov 2015.

Mallinckrodt acquired Ikaria Inc. in 2015 to strengthen its business in the hospital market. With the addition of Inomax to its portfolio, Mallinckrodt gained access to the market for neonatal critical care, which helped it to diversify its portfolio in the Specialty Brands segment. The company also acquired Therakos Inc. in Sep 2015 to widen its presence from multimodal surgical pain management and critical care respiratory therapies in neonatal intensive care units to include innovative immunotherapy therapies. Moreover, in Feb 2016 the company acquired three commercial stage topical hemostasis drugs from The Medicines Company to strengthen its growing hospital portfolio.

However, on Aug 2016, the company entered into a definitive agreement to sell its Nuclear Imaging business to IBA Molecular for $690 million.

Mallinckrodt has an excellent earnings track record with the company delivering positive earnings surprises in each of the last four quarters with a positive average earnings surprise of 11.88%. Estimate revisions for Mallinckrodt for fiscal 2017 have been static in the last thirty days.

MALLINCKRODT PL Price and EPS Surprise

MALLINCKRODT PL Price and EPS Surprise | MALLINCKRODT PL Quote

Currently, Mallinckrodt has a Zacks Rank #2 (Buy), but that could definitely change following the company’s earnings report which was just released. We have highlighted some of the key stats from this just-revealed announcement below:

Earnings: Mallinckrodt beat on earnings. Our consensus called for EPS of $1.98, and the company reported EPS of $2.04.

Revenue: Revenues also surpassed expectations. Mallinckrodt posted revenues of $887.2 million, compared to our consensus estimate of $862 million.

Key Stats: Revenue growth was primarily driven by duble-digit volume key branded drugs –  Acthar, Inomax, Ofirmev, and Therakos However, sales of from the specialty generics segment were down. Adjusted selling, general and administrative (SG&A) expenses for the quarter increased 17% and adjusted research and development (R&D) expense in the fourth quarter fiscal 2016 increased 9.9%.

Share Price Impact: Shares rose more than 4% in pre-market trading.

Check back later for our full write up on this Mallinckrodt earnings report later!

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