Forest Laboratories Beats Analyst Estimates on EPS

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Forest Laboratories (NYS: FRX) reported earnings on Jan. 17. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended Dec. 31 (Q3), Forest Laboratories beat expectations on revenues and beat expectations on earnings per share.

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

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

Revenue details
Forest Laboratories booked revenue of $1.2 billion. The 21 analysts polled by S&P Capital IQ looked for sales of $1.2 billion. Sales were 7.8% higher than the prior-year quarter's $1.1 billion


Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions.

EPS details
EPS came in at $1.04. The 28 earnings estimates compiled by S&P Capital IQ predicted $1.01 per share. GAAP EPS of $1.04 for Q3 were 6.3% lower than the prior-year quarter's $1.11 per share.


Source: S&P Capital IQ. Quarterly periods. Figures may be non-GAAP to maintain comparability with estimates.

Margin details
For the quarter, gross margin was 78.2%, 40 basis points better than the prior-year quarter. Operating margin was 29.5%, 480 basis points worse than the prior-year quarter. Net margin was 23.1%, 560 basis points worse than the prior-year quarter.

Looking ahead
Next quarter's average estimate for revenue is $1.0 billion. On the bottom line, the average EPS estimate is $0.71.

Next year's average estimate for revenue is $4.5 billion. The average EPS estimate is $3.66.

Investor sentiment
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Forest Laboratories is hold, with an average price target of $35.52.

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.

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