Questcor Pharmaceuticals Beats on Both Top and Bottom Lines

Questcor Pharmaceuticals (Nasdaq: QCOR  ) reported earnings on July 30. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended June 30 (Q2), Questcor Pharmaceuticals beat expectations on revenues and beat expectations on earnings per share.

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

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

Revenue details
Questcor Pharmaceuticals booked revenue of $184.6 million. The nine analysts polled by S&P Capital IQ expected to see sales of $169.0 million on the same basis. GAAP reported sales were 64% higher than the prior-year quarter's $112.5 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 $1.12. The six earnings estimates compiled by S&P Capital IQ averaged $0.96 per share. GAAP EPS of $1.12 for Q2 were 72% higher than the prior-year quarter's $0.65 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 90.7%, 360 basis points worse than the prior-year quarter. Operating margin was 55.8%, 150 basis points better than the prior-year quarter. Net margin was 37.5%, 60 basis points better than the prior-year quarter. (Margins calculated in GAAP terms.)

Looking ahead
Next quarter's average estimate for revenue is $177.6 million. On the bottom line, the average EPS estimate is $1.04.

Next year's average estimate for revenue is $666.2 million. The average EPS estimate is $3.72.

Investor sentiment
The stock has a two-star rating (out of five) at Motley Fool CAPS, with 505 members out of 558 rating the stock outperform, and 53 members rating it underperform. Among 153 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 131 give Questcor Pharmaceuticals a green thumbs-up, and 22 give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Questcor Pharmaceuticals is outperform, with an average price target of $52.44.

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 of Motley 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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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 July 31, 2013, at 9:40 AM, stoxmri wrote:

    QCOR is a great example of why you should follow the Motley Fool rather than the alleged analysts on Wall Street. Look at the 3Q consensus estimates used in this article for both revenue and EPS and multiply them by 4. That gives you revenue of $710MM and EPS of $4.16, both of which I believe are way too low for next year. Yet look at the consensus estimates by the Wall Street slugs mentioned above of $666MM in revenue and $3.72 in EPS. Does anyone seriously think revenues and earnings are going to be declining over the next 18 months as QCOR expands their sales force, increases market share from very small current share, enters new markets and addresses new disease states?

    HELLO, this is a growth stock delivering 20%+ growth for at least the next several years. The bottom line, do your own work and use Motley Fool resources, ignore Wall Street slugs who are really shills for investment banking. If this company was about to do an offering or a big M&A deal, the analysts would be raising their price targets and estimates to try to win big fees for leading a deal. No deal, who cares, any old estimate or opinion will do.

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