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Mylan's (MYL) Q4 Earnings Beat, Revenues Miss Estimates

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Mylan N.V. MYL reported adjusted earnings of $1.40 per share in the fourth quarter of 2019, beating the Zacks Consensus Estimate of $1.29. Also, the reported figure improved from the year-ago quarter’s $1.30.

However, quarterly revenues of $3.19 billion missed the Zacks Consensus Estimate of $3.21 billion. Revenues increased 4% reportedly and 5% at constant exchange rate (“CER”) from the prior-year quarter.

Shares of the company fell 3.64% during after-market trading following the earnings release. Mylan’s stock has depreciated 32% in the past year compared with the industry’s decline of 0.9%.

Quarter in Detail

The company posts results in three segments on a geographic basis — North America, Europe and Rest of World.

The North America segment’s net sales came in at $1.13 billion, up 3% year over year. This increase was primarily driven by new product sales, partially offset by a decline in sales of existing products due to lower volumes, and lower pricing, to some extent. New product sales were primarily aided by sales of the Wixela Inhub and other new products. The lower sales of existing products came in due to changes in the competitive environment, including the loss of exclusivity of tadalafil.

Net sales in the Europe segment came in at $1.11 billion, up 2% year on year. This upswing primarily resulted from new product sales and higher volumes of existing products. Net sales in the segment were up 5% at CER.

The Rest of World segment net sales of $927.9 million were up 9% on higher volumes of the existing products sold in certain emerging markets, China and Japan, as well as new product sales, primarily in Australia, India and certain emerging markets. Net sales were up 9% at CER.

Adjusted gross margin of 53.3% declined from the year-ago quarter’s 54.6%.

2019 Results

Revenues for the full year came in at $11.50 billion, up 1% from the prior year.  Earnings per share came in at $4.42 compared with the $4.58 recorded in 2018.

2020 Guidance

Revenues are projected between $11.5 billion and $12.5 billion. The Zacks Consensus Estimate of $11.96 billion lies within this guidance.

Our Take

Mylan’s fourth-quarter earnings beat estimates, while sales missed the consensus mark. Nevertheless, the company’s new products did well in the quarter and achieved its target of $1 billion on Wixela, the generic of GlaxoSmithKline’s GSK Advair Diskus and Fulphila, and several other products. Other products like Creon, Influvac, Dona, Amitiza and Glatiramer Acetate 40 mg generated double-digit growth. Yupelri, developed in collaboration with Theravance Biopharma, Inc TBPH also boosted growth.

Meanwhile, the company’s decision to merge with Upjohn, Pfizer's PFE off-patent branded and generic established medicines business is also encouraging. In November 2019, Mylan and Pfizer announced the name of the new entity to be Viatris. Subsequently, the companies have announced two future Viatris board members. The merger will be completed by mid-2020.

However, Mylan warned that its business might be impacted by the outbreak of the Coronavirus given the global nature of the company’s supply-chain operations and businesses.

Zacks Rank

Mylan currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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