Real-Time Quote
Quote | News | Chart | Details
GSK News & Analysis
Putting Mylan’s Earnings Quality Under the Microscope: Greenberg
16 Mar 2012 EDT - CNBC.com
Page 1 of 4 | Next Page
Show Entire Article

When Mylan Inc. held its analyst day a few weeks ago, it offered an earnings per share forecast for (wait for it!) 2018.

That’s six years from now. As one analyst said: The $6.00 forecast for 2018 is a “pretty big bogey” compared with the $2.75 analysts are expecting at the high end for next year.

I’m always dubious of long-term forecasts. IBM is perhaps most famous for putting up a five-year forecast, but at least it shows a detailed “road map” of how much of the target will come from such things as buybacks, acquisitions and genuine business.

Mylan merely lays out 11 general “growth drivers” such as “biogenerics,” “respiratory” and “neurology.”

Mylan has a history of three-year earnings per share targets — and meeting them. That gets to a bigger issue: Earnings quality, which should be scoured at any company that offers a long-term target, especially one as long as Mylan’s.

And that gets to an even bigger issue to watch at Mylan: The accounting surrounding its December deal to buy rights (or as Mylan CFO John Sheehan tells me, “intellectual knowledge”) from Pfizer to develop a generic version of Pfizer’s dry-powder asthma inhaler, currently sold by GlaxoSmithKline under the brand Advair.

Page 1 of 4 | Next Page
Show Entire Article
GSK News & Analysis
Real-Time Quote
omniture pixel