Endo International Has Raised Its Earnings Guidance for 2018

Earnings guidance for 2018

In its Q2 2018 earnings conference call, Endo International (ENDP) raised its 2018 adjusted EBITDA guidance from $1.2 billion–$1.3 billion to $1.27 billion–$1.33 billion. It also raised its projections for adjusted diluted EPS from $2.15–$2.50 to $2.50–$2.60. It expects its adjusted gross margin to be 68.5%–69.5%, which is higher than its previously projected range of 67%–68%.

Endo International Has Raised Its Earnings Guidance for 2018

Wall Street analysts have projected Endo International’s 2018 adjusted diluted EPS at $2.50, which would be a YoY decline of 34.4%.

Its peers Mylan (MYL), Mallinckrodt (MNK), and Jazz Pharmaceuticals (JAZZ) are expected to report adjusted diluted EPS of $4.85, $6.50, and $13.12, respectively, in 2018.

Operating expenses guidance

Endo International expects to report adjusted operating expenses as a percentage of revenues in the range of 26%–27% in 2018, which is higher than the previously projected range of 25.5%–26.5%. It has projected adjusted operating expenses for the first half of 2018 that are similar to the first half of 2017. The rise in operating expenses is due to rising selling and general expenses associated with Xiaflex and increasing R&D (research and development) investments.

In February, the company initiated the enrollment of patients in two Phase 3 trials that are evaluating collagenase clostridium histolyticum (or CCH) as a non-invasive treatment option for cellulite. The company expects to release top-line data from these trials in the fourth quarter.

Endo International has projected interest expenses of $530 million–$540 million for 2018. It expects its 2017 adjusted effective tax rate to be 11%–12%. It has also increased the 2018 estimate for its adjusted diluted shares outstanding to 229 million from the previously projected 226 million.