The Gory Details on Elan's Double Miss

Seth Jayson, The Motley Fool
Updated

Elan (NYS: ELN) reported earnings on Feb. 8. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended Dec. 31 (Q4), Elan missed estimates on revenues and missed expectations on earnings per share.

Compared to the prior-year quarter, revenue contracted, and GAAP loss per share grew.

Margins dropped across the board.

Revenue details
Elan reported revenue of $271.0 million. The five analysts polled by S&P Capital IQ expected a top line of $286.3 million. GAAP sales were 12% lower than the prior-year quarter's $308.9 million.

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Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.

EPS details
Non-GAAP EPS came in at -$0.07. The four earnings estimates compiled by S&P Capital IQ predicted $0.02 per share on the same basis. GAAP EPS were -$0.23 for Q4 compared to -$0.12 per share for the prior-year quarter.

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Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.

Margin details
For the quarter, gross margin was 45.6%, 360 basis points worse than the prior-year quarter. Operating margin was -2.0%, 1,000 basis points worse than the prior-year quarter. Net margin was -49.7%, 2,830 basis points worse than the prior-year quarter.

Looking ahead
Next quarter's average estimate for revenue is $296.2 million. On the bottom line, the average EPS estimate is $0.03.

Next year's average estimate for revenue is $1.28 billion. The average EPS estimate is $0.15.

Investor sentiment
The stock has a four-star rating (out of five) at Motley Fool CAPS, with 904 members rating the stock outperform and 72 members rating it underperform. Among 188 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 175 give Elan a green thumbs-up, and 13 give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Elan is outperform, with an average price target of $12.47.

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At the time thisarticle was published Seth Jayson owned shares of the following at the time of publication: Elan. 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. 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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