You could easily point out Mylan's (NASDAQ:MYL) trouble spot on a map when the drugmaker reported its third-quarter results in November. The company struggled mightily in the U.S. because of a laundry list of problems. However, things looked much better for Mylan on the international front.
The drugmaker announced its 2018 fourth-quarter results after the market closed on Tuesday. It was another verse of the same tune, but the singing from the U.S. market was even more off-pitch. Here are the highlights from the company's fourth-quarter update.
Mylan results: The raw numbers
|$3.08 billion||$3.24 billion||
Net income from continuing operations
|$51.2 million||$244.3 million||
Adjusted earnings per share (EPS)
What happened with Mylan this quarter?
There really wasn't very much good news for Mylan in the fourth quarter. Net sales fell in North America by 16% to $1.1 billion, with lower volumes for existing prices and lower prices to boot. In addition, Mylan continued to feel the negative impact of a restructuring at its manufacturing facility in Morgantown, West Virginia.
Things looked a little better on the international front. However, European sales increased by only 1% year over year to $1.09 billion. Sales in the rest of the world grew 4% year over year to $851.4 million.
Currency fluctuations also negatively affected Mylan's year-over-year comparisons. The drugmaker stated that European sales increased by 5% and sales in the rest of the world jumped 11% on a constant-currency basis.
Mylan's GAAP net income deteriorated significantly from the prior-year period. Lower sales played a big role in the earnings decline. However, the company's cost of goods sold also increased although sales fell. And while Mylan reduces its operating costs, it wasn't nearly enough to offset its other problems.
Year-over-year comparisons of adjusted earnings per share, while negative, didn't look as bad as the GAAP numbers. That's primarily because of Mylan's adjustments related to amortization expenses for product rights acquisitions and cost-of-sales adjustments related to its Morgantown facility.
What management had to say
Mylan CEO Heather Bresch stated:
Our 2018 results were strong, especially in light of the fact that we had lower than expected uptake on generic Copaxone and did not receive our generic Advair approval, demonstrating once again the resiliency of our business model. We adapted quickly and strategically to market conditions, while at the same time remained a leader for the generics industry and an advocate for changes to the current structural issues in the U.S. healthcare system that hinder access to generics.
Check out the latest Mylan earnings call transcript.
Better news could be on the way for Mylan. The company provided full-year 2019 guidance that called for revenue between $11.5 billion and $12.5 billion. That's a 5% year-over-year increase at the midpoint of the range.
However, Mylan also expects adjusted EPS between $3.80 and $4.80. The midpoint of that range reflects a 6% decrease from 2018. Why lower earnings with a revenue increase? Mylan plans to invest in sales and marketing and research and development this year.
Although Mylan's fourth-quarter performance was certainly disappointing, the company's overall business remains healthy. The drugmaker continues to generate strong cash flow. It's reducing its debt load. And Mylan has new products on the way that should boost its revenue by more than $1 billion annually.