Savient Pharmaceuticals Earnings Preview

Investors braced for a bumpy ride ahead of Savient Pharmaceuticals' (Nasdaq: SVNT  ) earnings announcement as the company has wavered between beating and falling short of analyst predictions during the past fiscal year. The company will unveil its latest earnings on Monday, Feb. 27. Savient Pharmaceuticals is focused on developing and marketing pharmaceutical products that target unmet medical needs in both niche and broader specialty markets.

What analysts say:

  • Buy, sell, or hold?: Half of analysts think investors should stand pat on Savient Pharmaceuticals. Analysts don't like Savient Pharmaceuticals as much as competitor Par Pharmaceutical overall. Seven out of nine analysts rate Par Pharmaceutical a buy compared to one out of eight for Savient Pharmaceuticals.
  • Wall Street earnings expectations: The average analyst estimate is a loss of $0.39 per share. Estimates range from a loss of $0.45 to a loss of $0.35.

What our community says:
CAPS All-Stars are strongly supporting the stock, with 88.1% assigning it an outperform rating. Most of the community is in line with the All-Stars, with 93.3% giving it a rating of outperform. Fools feel positively about Savient Pharmaceuticals, though the message boards have been quiet lately, with only two posts in the past 30 days. Despite the majority sentiment in favor of Savient Pharmaceuticals, the stock has a middling CAPS rating of three out of five stars.

Management:
The company's gross margin shrank by 135 percentage points in the last quarter. Revenue rose 161.2% while cost of sales rose 988.8% to $4.6 million from a year earlier.

Now let's look at how efficient management is at running the business. Traditionally, margins represent the efficiency with which companies capture portions of sales dollars. Savient Pharmaceuticals' gross margins have been decreasing year over year for the last four quarters. Gross margins reflect the total sales revenue retained after costs. See how Savient Pharmaceuticals has been doing for the last four quarters:

Quarter

Q3

Q2

Q1

Q4

Gross Margin

(77.6%)

49.2%

67.8%

(74.5%)

Operating Margin

(1167.3%)

(1542.8%)

(1510.9%)

(1955.1%)

Net Margin

(1061.3%)

(1524.6%)

(1048.8%)

(47.0%)

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Earnings estimates provided by Zacks.

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Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On February 22, 2012, at 2:02 PM, earthunit wrote:

    IMHO, the story on Feb 27th will not be earnings or lack thereof. It will be news about new indications for Krystexxa, and possible partnerships for outside of the USA.

    Bottom line is that I believe the news on Feb 27th will be a net very bullish.

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