Dr. Reddy's Laboratories Beats Analyst Estimates on EPS

Seth Jayson, The Motley Fool
Updated

Dr. Reddy's Laboratories (NYS: RDY) reported earnings on Feb. 3. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended Dec. 31 (Q3), Dr. Reddy's Laboratories beat expectations on revenues and beat expectations on earnings per share.

Compared to the prior-year quarter, revenue improved significantly and GAAP earnings per share increased significantly.

Margins increased across the board.

Revenue details
Dr. Reddy's Laboratories reported revenue of $521.9 million. The five analysts polled by S&P Capital IQ predicted sales of $496.2 million. Sales were 23% higher than the prior-year quarter's $425.6 million.

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Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions.

EPS details
Non-GAAP EPS came in at $0.56. The one earnings estimate compiled by S&P Capital IQ averaged $0.50 per share on the same basis. GAAP EPS of $0.57 for Q3 were 58% higher than the prior-year quarter's $0.36 per share.

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Source: S&P Capital IQ. Quarterly periods. Figures may be non-GAAP to maintain comparability with estimates.

Margin details
For the quarter, gross margin was 59.9%, 500 basis points better than the prior-year quarter. Operating margin was 27.3%, 1,140 basis points better than the prior-year quarter. Net margin was 18.5%, 410 basis points better than the prior-year quarter.

Looking ahead
On the bottom line, the average EPS estimate is $0.61.

Next year's average estimate for revenue is $1.86 billion. The average EPS estimate is $1.72.

Investor sentiment
The stock has a four-star rating (out of five) at Motley Fool CAPS, with 514 members out of 541 rating the stock outperform, and 27 members rating it underperform. Among 146 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 142 give Dr. Reddy's Laboratories a green thumbs-up, and four give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Dr. Reddy's Laboratories is outperform, with an average price target of $34.48.

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At the time thisarticle was published Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor ofMotley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. Motley Fool newsletter services have recommended buying shares of Dr. Reddy's Laboratories. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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