The 10-second takeaway
For the quarter ended March 31 (Q2), Avanir Pharmaceuticals crushed expectations on revenues and missed expectations on earnings per share.
Compared to the prior-year quarter, revenue expanded significantly and GAAP loss per share improved.
Margins grew across the board.
Avanir Pharmaceuticals booked revenue of $10.0 million. The four analysts polled by S&P Capital IQ wanted to see revenue of $7.5 million on the same basis. GAAP reported sales were much higher than the prior-year quarter's $1.4 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 -$0.13. The five earnings estimates compiled by S&P Capital IQ anticipated -$0.12 per share. GAAP EPS were -$0.13 for Q2 versus -$0.12 per share for the prior-year quarter.
Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.
For the quarter, gross margin was 94.7%, 270 basis points better than the prior-year quarter. Operating margin was -169.8%, 83,790 basis points better than the prior-year quarter. Net margin was -169.7%, 83,730 basis points better than the prior-year quarter.
Next quarter's average estimate for revenue is $9.3 million. On the bottom line, the average EPS estimate is -$0.11.
Next year's average estimate for revenue is $32.7 million. The average EPS estimate is -$0.46.
The stock has a two-star rating (out of five) at Motley Fool CAPS, with 194 members out of 256 rating the stock outperform, and 62 members rating it underperform. Among 57 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 37 give Avanir Pharmaceuticals a green thumbs-up, and 20 give it a red thumbs-down.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Avanir Pharmaceuticals is outperform, with an average price target of $5.40.
Over the decades, small-cap stocks like Avanir Pharmaceuticals have produced market-beating returns, provided they're value-priced and have solid businesses. Read about a pair of companies with a lock on their markets in "Too Small to Fail: 2 Small Caps the Government Won't Let Go Broke." Click here for instant access to this free report.
- Add Avanir Pharmaceuticals to My Watchlist.
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.