We are pleased with Mylan Inc.’s (MYL) second-quarter results. The company reported adjusted quarterly revenue of $1.26 billion, a 6% increase over the year-ago period. Its adjusted EPS came in at $0.32, beating the Zacks Consensus Estimate of $0.29. Based on strong second-quarter earnings, Mylan raised its revenue guidance for 2009. The revenue guidance now stands at $4.9 billion to $5.1, up from the earlier forecast of $4.6 billion to $4.9 billion.
On a GAAP basis, Mylan posted revenue of $1.27 billion compared to $1.20 billion in the corresponding period last year. Net income (GAAP) for the second quarter was $58 million (per share $0.19) compared to net loss of $16.3 million (per share loss of $0.05) in the year-ago period.
All three segments of the company contributed to revenue growth. The revenue would have been higher but for the unfavorable movement of foreign currency. The Generics Segment accounted for the majority of the increase ($41.9 million) followed by the Specialty Segment ($15.8 million) and the Matrix Segment ($10.9 million).
Mylan’s Generics Segment posted quarterly revenue of $1.03 billion primarily from sales in North America, Europe, the Middle East and Africa (collectively, EMEA) and Asia Pacific, compared to $983.1 million in the same period a year ago. The Specialty and Matrix segments contributed revenue of $122 million and $116 million, respectively.
Operating expenses on a GAAP basis recorded a marginal increase of 4% to $353 million compared to $340 million in the year-ago period. Certain restructuring activities undertaken by the company earlier led to an 8% decline in R&D expenses. This was partially offset by a non-recurring, up-front payment of $18.0 million made with respect to a collaboration agreement. Higher salary-related costs led to a 7.5% increase in SG&A expenses.
We believe Mylan’s revised guidance should be achievable. New generic product launches, especially generic versions of Keppra and Depakote ER should help maintain momentum in 2009. We have a neutral recommendation on the stock.
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