Comparing Endo’s and Mallinckrodt’s Revenue Forecasts



Revenue guidance for fiscal 2019

In its fourth-quarter investor presentation, Endo International (ENDP) guided for fiscal 2019 revenue of $2.76 billion–$2.96 billion, representing a low single-digit percentage YoY (year-over-year) decline. In its fourth-quarter conference call, the company attributed this revenue performance to U.S. Generic Pharmaceuticals sales falling due to growing competition. However, the company expects this weakness to be offset by solid growth in its US Branded – Specialty & Established Pharmaceuticals and U.S. Branded – Sterile Injectables segments.

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Endo expects fiscal 2019 to be a transitional year for its U.S. Generic Pharmaceuticals segment. Whereas the company anticipates competition for many wide-margin generic products, new generic product launches are scheduled for late fiscal 2019. In its fourth-quarter conference call, Endo said expects its U.S. Generic Pharmaceuticals revenue to fall by a mid-to-high-teens percentage YoY.

On December 6, Mallinckrodt (MNK) announced plans to divest its specialty generics and Amitiza businesses to form a new company. To account for this possibility, the company has guided for specialty brands, specialty generics, and Amitiza net sales growing 1%–4% YoY in fiscal 2019.

Wall Street’s projections

Analysts expect Endo International’s revenue to be $2.88 billion, $2.94 billion, and $2.97 billion in fiscal 2019, fiscal 2020, and fiscal 2021, respectively, implying YoY changes of -2.26%, 2.02%, and 1.06%. Meanwhile, they expect Mallinckrodt’s revenue to be $3.06 billion, $2.99 billion, and $2.72 billion in fiscal 2019, fiscal 2020, and fiscal 2021, respectively, implying YoY revenue changes of -4.91%, -2.25%, and -9.07%. These projections do not include the impact of Mallinckrodt’s divestiture of its specialty generics and Amitiza businesses, anticipated in the second half of 2019.

While Endo’s revenue is expected to grow slightly from fiscal 2019 to fiscal 2021, Mallinckrodt’s is expected to fall. Next, we’ll discuss Endo’s and Mallinckrodt’s fiscal 2019 EPS projections.


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