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Mallinckrodt (MNK) Tops Q4 Earnings on Solid Sales Growth

CBM HSKA VNDA MNK

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Mallinckrodt Public Limited Company (MNK - Free Report) reported adjusted earnings of $2.04 per share in the fourth quarter of fiscal 2016 (ended Sep 30, 2016), beating the Zacks Consensus Estimate of $1.98. Earnings were also up from the year-ago figure of $2.02. Higher sales and profits in the Specialty Brands segment offset weakness in Specialty Generics and increased costs.

Net sales in the quarter came in at $887.2 million, up 13.9% year over year, and beat the Zacks Consensus Estimate of $862 million. Top-line growth was primarily driven by double-digit increase in volumes of key branded drugs – Acthar, Inomax, Ofirmev and Therakos. Net sales also benefitted from an additional selling week in the quarter.

Quarter in Detail

The company reports results under two segments – Specialty Brands and Specialty Generics.

Sales at the Specialty Brands segment were $633.1 million, up 35.1% from the year-ago quarter. Acthar, Mallinckrodt’s largest product, garnered sales of $327.0 million, up 19.3%. Ofirmev sales surged 23.1% year over year to $75.6 million. Inomax, its second-largest product, generated sales of $126.9 million, up 22.4%.

However, Specialty Generics recorded sales of $239.8 million, down 19.2% due to weak performance of various product categories as stiff competition hurt both volume and price.

Adjusted selling, general and administrative (SG&A) expenses in fourth-quarter fiscal 2016 increased 17%, primarily due to the addition of Therakos immunotherapy platform. Meanwhile, adjusted research and development (R&D) expense was up 9.9%.

Fiscal 2016 Results

In fiscal 2016, Mallinckrodt recorded sales of $3.4 billion, up 17.2% from fiscal 2015. Adjusted diluted earnings per share from continuing operations were $7.85 in fiscal 2016, up 15.6% from the fiscal 2015 level of $6.79.

MALLINCKRODT PL Price, Consensus and EPS Surprise

 

MALLINCKRODT PL Price, Consensus and EPS Surprise | MALLINCKRODT PL Quote

Zacks Rank & Other Key Picks

Mallinckrodt currently carries a Zacks Rank #2 (Buy). Other favorably placed stocks in the health care sector include Heska Corp. (HSKA - Free Report) , Cambrex Corp. (CBM - Free Report) and Vanda Pharmaceuticals, Inc. (VNDA - Free Report) . 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.

Heska’s earnings estimates have increased from $1.13 to $1.35 for 2016 and from $1.38 to $1.53 for 2017 over the last 60 days. The company has posted a positive earnings surprise in all of the four trailing quarters with an average beat of 301.64%. Its share price has increased 69.6% year to date.

Cambrex’s earnings estimates increased from $2.46 to $2.55 for 2016 and from $2.91 to $3.06 for 2017 over the last 60 days. The company posted a positive earnings surprise in three of the four trailing quarters with an average beat of 19.78%. Its share price has increased 4.3% year to date.

Vanda’s loss estimates have narrowed from 68 cents to 56 cents for 2016, while its earnings estimates increased from 16 cents to 17 cents for 2017 over the last 60 days. The company has posted a positive earnings surprise in three of the four trailing quarters with an average beat of 56.65%. Its share price surged 83.7% year to date.

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