Teva, Mylan Top View, But Revenues Miss; Backs 2014 Outlook

(RTTNews) - Generic drugmakers Teva Pharmaceutical Industries Ltd. (TEVA) and Mylan, Inc. (MYL) reported Thursday profits for the first quarter that grew percent from last year, reflecting improved margins and revenue growth.

Adjusted earnings per share at both companies topped analysts' expectations, while both quarterly revenues missed their estimates. Both the companies also reaffirmed their forecast for the full-year 2014.

"We are pleased with the quarter's results. Patients benefitted from several significant generic and specialty medicine launches, most notably our Copaxone 40mg in the U.S. Our global generics business delivered increased profitability, and our U.S. generics revenues were up 17% year-over-year," Teva President and CEO Erez Vigodman said in a statement.

Petach Tikva, Israel-based Teva reported net income of $744 million or $0.87 per share for the first quarter, higher than $630 million, or $0.74 per share in the prior-year quarter.

Excluding items, adjusted net income for the quarter was $1.04 billion or $1.22 per share, compared to $960 million or $1.12 per share in the year-ago quarter.

On average, 19 analysts polled by Thomson Reuters expected the company to report earnings of $1.21 per share for the quarter. Analysts' estimates typically exclude one-time items.

Net revenues for the quarter grew 2 percent to $5.0 billion from $4.90 billion in the same quarter last year, but missed sixteen Wall Street analysts' consensus estimate of $5.11 billion.

Generic medicine revenues grew 3 percent to $2.40 billion, with U.S. generic medicine revenues increased 17 percent, and specialty medicine revenues also increased 3 percent to $2.11 billion from the year-ago quarter. Meanwhile, OTC revenues declined 12 percent to $269 million from last year.

Gross profit margin for the quarter improved 110 basis points to 53.9 percent from last year's 52.8 percent.

Additionally, the company's board declared a cash dividend of NIS 1.21 per share, or nearly 34.7 cents as per the rate of exchange on April 29, 2014 for the first quarter of 2014. The record date would be May 20, 2014, and the payment date would be June 2, 2014.

Looking ahead to fiscal 2014, the company continues to expect adjusted earnings in the range of $4.20 to $4.50 per share, on projected net revenues between $19.3 billion and $20.3 billion. Street is currently looking for full-year 2014 earnings of $4.69 per share on annual revenues of $20.14 billion.

"During 2014, we will deliver significant savings as part of our cost reduction program, accelerate the transformation of our operations network, strengthen our global leadership in generics and continue to increase confidence in Teva," Vigodman added.

Meanwhile, Canonsburg, Pennsylvania-based Mylan reported net earnings of $115.9 million or $0.29 per share for the first quarter, higher than $106.9 million or $0.27 per share in the prior-year quarter.

Excluding items, adjusted earnings for the quarter was $260.4 million or $0.66 per share, compared to $245.9 million or $0.62 per share in the year-ago quarter.

On average, 16 analysts polled by Thomson Reuters expected the company to report earnings of $0.63 per share for the quarter. Analysts' estimates typically exclude special items.

Total revenues for the quarter increased 5.2 percent to $1.72 billion from $1.63 billion in the same quarter last year, but missed twelve Wall Street analysts' consensus estimate of $1.78 billion. Foreign currency translation had an unfavorable impact of about 2 percent on total revenues.

Total sales for the quarter increased to $1.70 billion from $1.62 billion from a year ago.

"Mylan's performance during the first quarter slightly exceeded our expectations and marked a great start to what we believe will be another good year. Our operations in India drove strong top-line growth as a result of increased sales from our antiretroviral franchise," Mylan CEO Heather Bresch stated.

Generics revenues increased to $1.52 billion from $1.41 billion in the previous year. Meanwhile, specialty revenues for the quarter were $202.8 million, down from $226.6 million a year ago.

Gross margins for the quarter expanded 50 basis points to 43.0 percent from 42.5 percent last year.

Looking ahead to fiscal 2014, the company continues to project adjusted earnings in a range of $3.25 to $3.60 per share. Street is currently looking for full-year 2014 earnings of $3.44 per share.

TEVA closed Wednesday's regular trading session at $48.86, down $0.73 on a volume of 8.03 million shares. In the past 52-week period, the stock has been trading in a range of $36.26 to $54.70. Meanwhile, MYL closed at $50.78, up $0.02 on a volume of 6.87 million shares.