Shire plc (SHPG) Misses Q2 EPS by 18c; Updates on Outlook

Shire plc (NASDAQ: SHPG) reported Q2 EPS of $2.63, $0.18 worse than the analyst estimate of $2.81. Revenue for the quarter came in at $1.56 billion versus the consensus estimate of $1.59 billion.

OUTLOOK

Following our strong performance in the first half of 2015, we've increased our guidance for Non GAAP diluted earnings per ADS to mid-to-high single digits growth in 2015 (prior guidance: mid-single digits).

On a Non GAAP CER basis we now expect product sales growth in the high single digits (prior guidance: mid-to-high single digits). When excluding INTUNIV, we anticipate low teens product sales growth on a Non GAAP CER basis (prior guidance: low double digit).

We now anticipate product sales growth to increase 4-5% on a reported basis (prior guidance: low-to-mid single digits). We continue to expect product sales growth to be held back three to four percentage points by foreign exchange headwinds which continue to most significantly impact ELAPRASE, REPLAGAL and VPRIV sales.

Royalties and other revenues are now expected to increase by 45-55% in 2015 (prior guidance: 30-40% higher).

Our Non GAAP gross margin is expected to be in line with 2014 (2014: 85.8%).

We continue to expect combined Non GAAP R&D and SG&A to increase in the high single digits. We expect that operating cost growth will moderate in the second half of the year as we compare against higher 2014 comparatives.

We expect our Non GAAP net interest and other expense to be in line with 2014 levels.

For 2015, we expect our effective tax rate on Non GAAP income to be in the range of 15-17%, before reverting to the 17-19% range in 2016 and beyond.

Taken together, we've increased our earnings guidance for the full year 2015, and now expect to deliver Non GAAP diluted earnings per ADS growth in the mid-to-high single digits in 2015 (low double digit growth on a Non GAAP CER basis).

Additionally, we expect to meet our 10x20 target of $6.5 billion of product sales in 2016, and exceed it with the contribution from our recent acquisition of NPS.

For earnings history and earnings-related data on Shire plc (SHPG) click here.

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