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Shire Pic (SHPG) Tops Q1 EPS by 14c; Boosts FY14 Outlook

May 1, 2014 7:08 AM EDT

Shire Pic (NASDAQ: SHPG) reported Q1 EPS of $2.36, $0.14 better than the analyst estimate of $2.22. Revenue for the quarter came in at $1.35 billion versus the consensus estimate of $1.38 billion.

OUTLOOK

Reflecting our strong start to the year, we are increasing our guidance for Non GAAP earnings per ADS to mid-to-high twenty percent growth for the full year 2014, (previous guidance: growth at a similar level to 2013) (2013: up 23%). This guidance reflects the contribution from the ViroPharma acquisition for the eleven months post closing.

We expect our operating costs to continue to benefit from our reorganization efforts and the focus on operational discipline shown in the first quarter. As a result we now anticipate combined Non GAAP R&D and SG&A to grow by 4-6% compared to 2013 (previous guidance: growth of 6-8%).

We expect to see higher Combined Non GAAP R&D and SG&A in the remaining quarters of 2014 than seen in the first quarter, as we continue to invest behind our pipeline and new acquisitions, including Fibrotech Therapeutics Pty Ltd ("Fibrotech"). The balance of the year will also see us increase our commercial spending on the preparation for the anticipated launch of SHP465 in the US and XAGRID in Japan, Binge Eating Disorder disease awareness investments and the continued international expansion of VYVANSE.

All other elements of our guidance remain unchanged, and we continue to expect:

  • Full year 2014 product sales growth in the mid-to-high teens.
  • Royalties and other revenues to be 10-15% lower than 2013.
  • Non GAAP gross margin to be approximately 1 percentage point lower than in 2013, due to slight dilution from ViroPharma.
  • Net interest expense to be at a similar level to 2013.
  • Core effective tax rate on Non GAAP income in the range of 18-20%.

Taken together, we are increasing our guidance for the full year 2014 and we now expect to deliver Non GAAP earnings per ADS growth in the mid-to-high twenty percent range.

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



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