The 10-second takeaway
For the quarter ended Dec. 31 (Q4), Akorn beat expectations on revenues and whiffed on earnings per share.
Compared to the prior-year quarter, revenue improved significantly, and GAAP earnings per share contracted significantly.
Gross margins increased, operating margins expanded, and net margins shrank.
Akorn chalked up revenue of $42.6 million. The four analysts polled by S&P Capital IQ expected revenue of $38.6 million on the same basis. GAAP reported sales were 77% higher than the prior-year quarter's $24 million.
Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.
EPS came in at $0.05. The three earnings estimates compiled by S&P Capital IQ predicted $0.06 per share. GAAP EPS of $0.05 for Q4 were 78% lower than the prior-year quarter's $0.23 per share.
Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.
For the quarter, gross margin was 60%, 690 basis points better than the prior-year quarter. Operating margin was 27%, 1,020 basis points better than the prior-year quarter. Net margin was 13.4%, 8,540 basis points worse than the prior-year quarter.
Next quarter's average estimate for revenue is $51.1 million. On the bottom line, the average EPS estimate is $0.08.
Next year's average estimate for revenue is $246.3 million. The average EPS estimate is $0.46.
The stock has a three-star rating (out of five) at Motley Fool CAPS, with 158 members rating the stock outperform and 13 members rating it underperform. Among 49 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 42 give Akorn 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 Akorn is buy, with an average price target of $12.75.
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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. 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.