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Mylan (MYL) to Report Q3 Earnings: What's in the Offing?

Zacks Equity Research

Mylan N.V. MYL is scheduled to report third-quarter 2019 results on Nov 5, before market open.

The company’s performance has been mixed so far, with earnings beating estimates in three of the trailing four quarters by average of 4.20% over the said time frame. In the last reported quarter, the company’s earnings beat estimates by 8.42%.

Mylan N.V. Price, Consensus and EPS Surprise

 

Mylan N.V. Price, Consensus and EPS Surprise

Mylan N.V. price-consensus-eps-surprise-chart | Mylan N.V. Quote

Why a Likely Earnings Beat?

Our proven model predicts an earnings beat for Mylan this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Earnings ESP: Mylan has an Earnings ESP of +0.70% as the Zacks Consensus Estimate is pegged at $1.14 and the Most Accurate Estimate at $1.15.

Zacks Rank: The company has a Zacks Rank #3.

Factors to Consider

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

North America reported 2% year-over-year growth in the second quarter, driven by new product sales, a trend that most likely continued in the third quarter. New product sales are being primarily driven by the robust performance of Fulphila (biosimilar to Neulasta) and Wixela Inhub, the generic of Advair Diskus. New launches should further boost sales.

In September, Mylan launched fulvestrant Injection, a generic version of AstraZeneca's AZN Faslodex Injection, which is used in women with certain types of advanced breast cancer, who have experienced menopause, as monotherapy and in advanced or metastatic breast cancer in combination with other products.

Net sales in Europe might have benefited from new products, including Hulio and the TOBI Podhaler, and higher volumes of existing products in the third quarter. 

Rest of the World segment’s net sales are likely to have benefited in the third quarter primarily owing to products sold in China and new product sales in Australia and emerging markets.

Key Anticipated Updates

Concurrent with the second-quarterly results, Mylan announced a merger agreement with Upjohn, Pfizer's off-patent branded and generic established medicines business (includes Lipitor, Celebrex and Viagra), to create a new global pharmaceutical company.  Per the agreement, which is structured as an all-stock, Reverse Morris Trust transaction, each Mylan share would be converted into one share of the new company. Mylan had previously undertaken a strategic review of its business due to challenging business conditions in North America and pricing pressure. The decision to merge with Upjohn comes as a result of this review. We expect management to throw more light on the progress made so far in this deal.

Share Price Performance

Mylan’s stock has lost 28.5% in the year so far compared with the industry’s decline of 2.9%.

Other Stocks to Consider

Here are a few other companies worth considering, as per our model these have the right mix of elements to beat on earnings this reporting cycle.

Allergan AGN has an Earnings ESP of +2.51% and a Zacks Rank of 2. The company is scheduled to release third-quarterly results on Nov 5. You can see the complete list of today’s Zacks #1 Rank stocks here.

Mallinckrodt MNK has an Earnings ESP of +0.36% and a Zacks Rank of 3. The company is scheduled to release third-quarterly results on Nov 5.

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