Mallinckrodt -9% despite better than expected earnings

|About: Mallinckrodt PLC (MNK)|By:, SA News Editor

Mallinckrodt (NYSE:MNK) fell 9.1% in today's trade, tumbling to the bottom of the S&P 500, despite reporting better than expected FQ4 earnings and revenues.

In the earnings conference call, CEO Mark Trudeau said MNK's specialty generics segment fell 19% in the quarter, and management expects "significant downward pressure on this segment to persist."

MNK also has experienced temporary "production issues" with a third-party manufacturer supporting its Therakos immunotherapy platform, and the company says the situation could continue into Q2 2017.

The company's decision to withhold FY 2017 guidance also troubled investors, which caused concerns about lack of sales visibility for Acthar, generics and the hospital franchise to weigh on shares, Guggenheim analyst Louise Chen says.

Barclays is one of several firms that remain optimistic, saying MNK's selloff was "outsized considering much of the disclosure on the call was largely expected, including specialty generics weakness and the 2017 outlook, which seemed relatively mild."