Valeant Pharmaceuticals International Beats on EPS But GAAP Results Lag

Seth Jayson, The Motley Fool
Updated

Valeant Pharmaceuticals International (NYS: VRX) reported earnings on Nov. 2. Here are the numbers you need to know.

The 10-second takeaway
 For the quarter ended Sep. 30 (Q3), Valeant Pharmaceuticals International met expectations on revenues and beat slightly on earnings per share.

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


Gross margins grew, operating margins grew, net margins dropped.

Revenue details
 Valeant Pharmaceuticals International logged revenue of $884.1 million. The 15 analysts polled by S&P Capital IQ predicted sales of $875.9 million on the same basis. GAAP reported sales were 47% higher than the prior-year quarter's $600.6 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 $1.15. The 18 earnings estimates compiled by S&P Capital IQ predicted $1.13 per share. GAAP EPS of $0.02 for Q3 were 85% lower than the prior-year quarter's $0.13 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 74.0%, 110 basis points better than the prior-year quarter. Operating margin was 25.8%, 130 basis points better than the prior-year quarter. Net margin was 0.9%, 590 basis points worse than the prior-year quarter.

Looking ahead
 Next quarter's average estimate for revenue is $978.2 million. On the bottom line, the average EPS estimate is $1.30.

Next year's average estimate for revenue is $3.50 billion. The average EPS estimate is $4.51.

Investor sentiment
 The stock has a three-star rating (out of five) at Motley Fool CAPS, with 186 members out of 209 rating the stock outperform, and 23 members rating it underperform. Among 70 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 63 give Valeant Pharmaceuticals International a green thumbs-up, and seven give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Valeant Pharmaceuticals International is outperform, with an average price target of $65.38.

The article Valeant Pharmaceuticals International Beats on EPS But GAAP Results Lag originally appeared on Fool.com.

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. The Motley Fool has no positions in the stocks mentioned above. 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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