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Shire plc (SHPG) Tops Q3 EPS Views; Boosts FY14 EPS Outlook

October 24, 2014 7:05 AM EDT

Shire plc (NASDAQ: SHPG) reported Q3 EPS of $2.93, $0.46 better than the analyst estimate of $2.47. Revenue for the quarter came in at $1.55 billion versus the consensus estimate of $1.46 billion.

OUTLOOK

We've delivered a very strong performance so far this year, and as a result we are increasing our guidance. We now expect to deliver Non GAAP earnings per ADS growth in the high thirty percent range in 2014 (previous guidance: low-to-mid thirty percent growth).

Following our strong product sales performance in the year to date, we now expect product sales growth for the full year 2014 in the low twenty percent range (previous guidance: high teens growth).

We anticipate product sales growth in the fourth quarter to be lower than we've delivered so far this year, as the third quarter benefited from Rare Diseases sales to customers who order less frequently, and as we lap against stronger comparatives in the fourth quarter.

We expect royalties and other revenues for 2014 to be 0-5% lower than in 2013, as we now anticipate recognizing additional milestone income in the fourth quarter of 2014.

We continue to anticipate that our Non GAAP gross margin will be approximately 1 percentage point lower than in 2013.

We continue to expect Combined Non GAAP R&D and SG&A to grow by 2-4% compared to 2013. We expect slightly higher operating costs in the fourth quarter than seen in the third quarter, as we continue to invest behind our innovative and exciting pipeline. The fourth quarter will also see an increase in commercial spending on Binge Eating Disorder disease awareness ahead of anticipated launch.

We continue to expect Non GAAP net interest expense to be approximately $10 million lower than in 2013.

Our core effective tax rate on Non GAAP income is still expected to be in the range of 17-19%.

Our current assumption of the diluted number of ordinary shares for full year 2014 is approximately 590 million.

Taken together, we now expect to deliver Non GAAP earnings per ADS growth in the high thirty percent range in 2014 (previous guidance: low-to-mid thirty percent growth).

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



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