Dr. Reddy's Laboratories Misses Where It Counts

Dr. Reddy's Laboratories (NYS: RDY) reported earnings on May 11. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended March 31 (Q4), Dr. Reddy's Laboratories beat slightly on revenues and missed estimates on earnings per share.

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

Gross margins contracted, operating margins improved, net margins dropped.

Revenue details
Dr. Reddy's Laboratories reported revenue of $522.3 million. The seven analysts polled by S&P Capital IQ expected to see revenue of $513.8 million on the same basis. GAAP reported sales were 15% higher than the prior-year quarter's $452.6 million.


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

EPS details
EPS came in at $0.51. The one earnings estimate compiled by S&P Capital IQ anticipated $0.52 per share. GAAP EPS of $0.40 for Q4 were 9.1% lower than the prior-year quarter's $0.44 per share.


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 52.6%, 170 basis points worse than the prior-year quarter. Operating margin was 20.0%, 500 basis points better than the prior-year quarter. Net margin was 12.9%, 370 basis points worse than the prior-year quarter.

Looking ahead
On the bottom line, the average EPS estimate is $0.40.

Next year's average estimate for revenue is $2.00 billion. The average EPS estimate is $1.94.

Investor sentiment
The stock has a four-star rating (out of five) at Motley Fool CAPS, with 506 members out of 535 rating the stock outperform, and 29 members rating it underperform. Among 115 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 109 give Dr. Reddy's Laboratories a green thumbs-up, and six 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 $35.71.

The drug and healthcare investing landscape is littered with also-rans and a few major winners. Is Dr. Reddy's Laboratories the right stock for you? Read "Discover the Next Rule-Breaking Multibagger" to learn about a company David Gardner believes will be a phenomenal success over the next few years. Click here for instant access to this free report.

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. 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.

Copyright © 1995 - 2012 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

Read Full Story

Can't get enough business news?

Sign up for Finance Report by AOL and get everything from retailer news to the latest IPOs delivered directly to your inbox daily!

Subscribe to our other newsletters

Emails may offer personalized content or ads. Learn more. You may unsubscribe any time.