Watson Pharmaceuticals Beats on Both Top and Bottom Lines
Watson Pharmaceuticals (NYS: WPI) reported earnings on April 30. Here are the numbers you need to know.
The 10-second takeaway
For the quarter ended March 31 (Q1), Watson Pharmaceuticals beat expectations on revenues and beat slightly on earnings per share.
Compared to the prior-year quarter, revenue improved significantly and GAAP earnings per share expanded significantly.
Margins dropped across the board.
Watson Pharmaceuticals notched revenue of $1.52 billion. The 17 analysts polled by S&P Capital IQ predicted a top line of $1.47 billion on the same basis. GAAP reported sales were 74% higher than the prior-year quarter's $876.5 million.
Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.
EPS came in at $1.64. The 22 earnings estimates compiled by S&P Capital IQ anticipated $1.60 per share. GAAP EPS of $0.43 for Q1 were 19% higher than the prior-year quarter's $0.36 per share.
Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.
For the quarter, gross margin was 40.7%, 770 basis points worse than the prior-year quarter. Operating margin was 7.7%, 740 basis points worse than the prior-year quarter. Net margin was 3.6%, 160 basis points worse than the prior-year quarter.
Next quarter's average estimate for revenue is $1.35 billion. On the bottom line, the average EPS estimate is $1.38.
Next year's average estimate for revenue is $5.47 billion. The average EPS estimate is $5.77.
The stock has a four-star rating (out of five) at Motley Fool CAPS, with 179 members out of 201 rating the stock outperform, and 22 members rating it underperform. Among 70 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 65 give Watson Pharmaceuticals a green thumbs-up, and five give it a red thumbs-down.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Watson Pharmaceuticals is outperform, with an average price target of $69.23.
The drug and health-care investing landscape is littered with also-rans and a few major winners. Is Watson Pharmaceuticals the right stock for you? Read "Discover the Next Rule-Breaking Multibagger" to learn about a company Fool co-founder David Gardner believes will be a phenomenal success over the next few years. Click here for instant access to this free report.
- Add Watson Pharmaceuticals to My Watchlist.
At the time this article 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. 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.
Copyright © 1995 - 2012 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.