Will Mylan (MYL) Miss Q1 Earnings? - Analyst Blog

Mylan Inc. MYL is set to report first quarter 2014 results on May 1 before market opens. Last quarter, the company had delivered a positive earnings surprise of 4.00%. Let's see how things are shaping up for this announcement.

Factors at Play

We expect revenues at Mylan, which it reports through two segments (Generics and Specialty), to be hurt by adverse foreign currency movements in the first quarter of 2014.

The Specialty segment should continue to perform well driven by strong sales of its flagship product, EpiPen auto-injector (severe allergic reactions). Mylan and Pfizer PFE have an agreement for EpiPen, under which Pfizer manufactures and Mylan markets the product. The EpiPen Auto-injector is the best prescribed treatment for severe allergic reactions. Sales of the Generics segment, the primary contributor to Mylan's revenues, should be soft due to the adverse impact of foreign currency movements, hurting the overall top line. Prudent cost management will however aid the bottom line.

Earnings Whispers?

Our proven model does not conclusively show that Mylan is likely to beat earnings this quarter. That is because a stock needs to have both a positive Earnings ESP (Expected Surprise Prediction) and a Zacks Rank of #1, 2 or 3 for this to happen. That is not the case here as you will see below.

Zacks ESP: The Earnings ESP for Mylan is 0.00% since the Most Accurate Estimate stands at 63 cents per share, in line with the Zacks Consensus Estimate.

Zacks Rank: Mylan's Zacks Rank #3 (Hold) when combined with a 0.00% ESP makes surprise prediction difficult.

Stocks to Consider

Here are some companies you may want to consider as our model shows that they have the right combination of elements − a positive Zacks Earnings ESP and a Zacks Rank #1, #2 or #3

Allergan Inc. AGN has an Earnings ESP of +0.89% and holds a Zacks Rank #2 (Buy). Allergan will be reporting first quarter earnings on May 7 before market opens.

Endo International plc ENDP has an Earnings ESP of +5.95% and holds a Zacks Rank #3. Endo will be reporting first quarter earnings on May 1 before the market opens.