* EPS ex-items 52 cents vs Street view 45 cents
* Revenue up 15 pct to $1.57 bln
(Updates with analyst comment, Teva details, new products)
By Toni Clarke
BOSTON, July 27 Mylan Inc (MYL.O) reported
higher-than-expected second-quarter earnings on Wednesday as
new product launches drove strong sales of its generic drugs in
the United States, offsetting weaker sales in Europe, where the
company faces pricing pressures.
Rival Teva Pharmaceutical Industries TEVA.O, by contrast,
reported weaker-than-expected North American sales, offset by
relatively strong results in Europe.
Unlike Teva, Mylan benefited from some major new product
launches in the United States. New products carry higher
margins than older products. On the other hand, Teva posted
relatively strong sales in Europe while Mylan was hurt by
pressure to cut prices, particularly in France.
Mylan's net profit rose to $146.4 million, or 33 cents a
share, from $51.5 million or 16 cents a share a year ago.
Revenue rose 15 percent to $1.57 billion, helped in part by
favorable foreign currency exchange.
Earnings excluding one-time items were 52 cents a share.
Analysts on average had expected 45 cents, according to Thomson
Reuters I/B/E/S. Analysts expected revenue of $1.49 billion.
"It's tough to argue with a solid beat which, based on our
conversations with investors, was far from certain," said Aaron
(Ronny) Gal, an analyst at Sanford Bernstein, in a note to
New product revenue from the United States included the
company's launch of Budesonide, the generic version of
AstraZeneca Plc's (AZN.L) Entocort EC, a treatment for Crohn's
disease; Letrozole, the generic version of Novartis AG's
NOVN.VX breast cancer drug Femara; and Cyclobenzaprine
Hydrochloride, the generic version of Cephalon Inc's CEPH.O
muscle relaxant Amrix. These gains were partially offset by a
decrease in revenue from existing products, mainly as a result
of lower pricing.
Many countries in Europe are increasing their use of
generic drugs. However, there is pressure from governments to
hold prices down.
Mylan's sales of generic drugs rose to $1.44 billion from
$1.23 billion a year ago. Revenue from North American sales
rose 27.2 percent to $749.1 million.
Revenue from Europe rose slightly, to $378.7 million from
$378 million. Foreign currency exchange had a positive impact
on sales, reflecting the weakening of the U.S. dollar against
Excluding currency benefits, revenue from Europe would have
declined 12 percent due to lower volume and pricing in a number
of European markets, primarily France and Germany, the company
said. But it reported continued market share gains in Italy.
"The EU weakness at minus 12 percent stings, particularly
when Teva simultaneously reports 4 percent improvement," said
Gal. "However, Mylan consistently reiterated it was expecting
pressure in France and would be down in Europe in the second
quarter as a result."
Overall, Teva posted a profit of $1.10 a share, slightly
topping Wall Street's estimate of $1.08 a share.
Mylan tightened the range of its earnings forecast for 2011
to $1.95 to $2.05 a share excluding items, from a previous
forecast of $1.90 to $2.10 a share.
"We remain extremely confident in our ability to achieve
not only our current goals, but also our long-term growth
targets of 15 percent and 20 percent growth in revenues and
EPS, respectively, by the end of 2013," said Robert Coury, the
company's chief executive, in a statement. "We believe 2012
especially is shaping up to be an exceptional year for Mylan."
The company completed a share repurchase program by buying
about 14.8 million shares for $350 million.
(Reporting by Toni Clarke; editing by John Wallace and Matthew