Warner Chilcott Beats Expectations But Takes A Step Back Anyway

Seth Jayson, The Motley Fool
Updated

Warner Chilcott (NAS: WCRX) reported earnings on May 10. Here are the numbers you need to know.

The 10-second takeaway
 For the quarter ended March 31 (Q1), Warner Chilcott met expectations on revenues and beat expectations on earnings per share.

Compared to the prior-year quarter, revenue dropped. Non-GAAP earnings per share shrank significantly. GAAP earnings per share didn't change.


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

Revenue details
 Warner Chilcott reported revenue of $593.0 million. The 15 analysts polled by S&P Capital IQ anticipated net sales of $593.5 million on the same basis. GAAP reported sales were 13% lower than the prior-year quarter's $685.0 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 $0.92. The 19 earnings estimates compiled by S&P Capital IQ predicted $0.84 per share. Non-GAAP EPS of $0.92 for Q1 were 21% lower than the prior-year quarter's $1.16 per share. GAAP EPS of $0.45 were the same as the prior-year quarter.

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 88.2%, 130 basis points worse than the prior-year quarter. Operating margin was 35.2%, 280 basis points worse than the prior-year quarter. Net margin was 19.1%, 260 basis points better than the prior-year quarter. (Margins calculated in GAAP terms.)

Looking ahead
 Next quarter's average estimate for revenue is $586.7 million. On the bottom line, the average EPS estimate is $0.82.

Next year's average estimate for revenue is $2.35 billion. The average EPS estimate is $3.30.

Investor sentiment
 The stock has a three-star rating (out of five) at Motley Fool CAPS, with 173 members out of 202 rating the stock outperform, and 29 members rating it underperform. Among 57 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 50 give Warner Chilcott 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 Warner Chilcott is outperform, with an average price target of $18.40.

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The article Warner Chilcott Beats Expectations But Takes A Step Back Anyway 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 position in any of the stocks mentioned. 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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