Shire’s strong 2nd-qtr financials justify holding out for higher AbbVie bid

Ireland-headquartered drugmaker Shire (LSE: SHP), which has just  accepted an increased $54 billion bid from the USA’s AbbVie (NYSE: ABBV), has delivered record second-quarter 2014 financial results, justifying its four times rejection of prior offers. Shire’s shares were up 3.6% to £49.78 but late afternoon.

Product sales for the quarter increased 22% to $1.47 billion, with total revenues up 20% to $1.50 billion. Non-generally-accepted accounting principle operating income came in at $630 million, a rise of 32%, with non-GAPP operating income from continuing operations of $338 million, down 14%. Non-GAPP diluted earnings per American Depositary Shares (EPADS) leapt 42% to $2.67, while US GAPP diluted EPADS rocketed 96% to $2.66.

Shire chief executive Flemming Ornskov said: “We have again delivered record quarterly results, with product sales growing by 22%, non GAAP diluted earnings per ADS growth of 42% and Non GAAP cash generation of $659 million. We have also again increased our expectations for earnings growth in 2014. These results and our increased guidance highlight the benefits of our strategic focus on high-growth areas. This performance is a testament to the value AbbVie sees in our company.”