The drugmaker reported adjusted quarterly profit of $2.04 per share, 7 cents a share above estimates. Revenue also exceeded Street forecasts by nearly $10 million. The company said its results were helped by double-digit growth in sales of its key branded drugs.
In the conference call, CEO Mark Trudeau said Mallinckrodt's specialty generics segment declined 19 percent during the quarter, and management expects "significant downward pressure on this segment to persist." He added that the segment continues to generate cash and the company is focused on supplementing its performance through careful cost management.
The pharmaceuticals company has also recently experienced temporary "production issues" with a third-party manufacturer supporting its immunotherapy platform, Therakos. Net sales of those kits accounted for $54.5 million in revenue for the quarter. The company said it is working diligently to mitigate the shortage, but added that it's possible the situation could continue into the second quarter of 2017.
Overall revenue impact is expected to be between $5 million and $10 million in each of the upcoming two quarters. The company noted that management believes it will be able to offset most of the earnings impact from strength in the rest of its businesses.
Analysts from Mizuho Securities USA, Wells Fargo Securities, Stifel Nicolaus and BMO Capital Markets seemed to agree with the company's optimism and reiterated a "buy" rating in their Tuesday notes. They said they expect sales from Mallinckrodt's remaining assets to offset most of the earnings impact of the supply disruption.
Mallinckrodt shares are down nearly 30 percent year to date.
— CNBC's Peter Schacknow contributed to this report.