Why Mallinckrodt Stock Tumbled Today
Shares of Mallinckrodt (NYSE: MNK) were tumbling 14.9% lower as of 3:43 p.m. EDT on Tuesday. The decline came after the drugmaker announced its first-quarter results before the market opened. Mallinckrodt reported net sales of $665.8 million, down nearly 16% year over year and below the average analyst estimate of $689.5 million. The company posted adjusted Q1 earnings of $1.64 per share, also down nearly 16% year over year but higher than the consensus Wall Street expectation of adjusted EPS of $1.45.
Probably the most concerning part of Mallinckrodt's Q1 update for investors was the company's outlook. CEO Mark Trudeau said that Mallinckrodt expects that "the next few quarters will be challenging due to the impact of COVID-19, as some of our products are sensitive to reduced numbers of surgical procedures and doctor visits."
Despite Mallinckrodt's earnings beat, there wasn't much for investors to be happy about with the company's first-quarter update. Sales fell pretty much across the board. Acthar Gel continued to face reimbursement challenges, with sales plunging 25.1% year over year. Sales also fell for other top products including Inomax, Ofirmev, and Amitiza. Mallinckrodt's specialty generics segment also continued to struggle, with sales declining 6% year over year primarily due to a short-term disruption in the production of acetaminophen.
Source Fool.com
