The 10-second takeaway
For the quarter ended March 31 (Q1), Salix Pharmaceuticals beat expectations on revenues and earnings per share.
Compared to the prior-year quarter, revenue improved significantly and GAAP earnings per share expanded.
Gross margins shrank, operating margins increased, and net margins improved.
Salix Pharmaceuticals booked revenue of $171.1 million. The 16 analysts polled by S&P Capital IQ predicted a top line of $167.7 million on the same basis. GAAP reported sales were 62% higher than the prior-year quarter's $105.9 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 $0.67. The 16 earnings estimates compiled by S&P Capital IQ forecast $0.56 per share. GAAP EPS of $0.15 for Q1 were much higher than the prior-year quarter's $0.00 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 80.0%, 240 basis points worse than the prior-year quarter. Operating margin was 22.5%, 1,550 basis points better than the prior-year quarter. Net margin was 5.8%, 550 basis points better than the prior-year quarter.
Next quarter's average estimate for revenue is $180.7 million. On the bottom line, the average EPS estimate is $0.51.
Next year's average estimate for revenue is $734.6 million. The average EPS estimate is $2.56.
The stock has a two-star rating (out of five) at Motley Fool CAPS, with 114 members out of 137 rating the stock outperform, and 23 members rating it underperform. Among 45 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 38 give Salix Pharmaceuticals 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 Salix Pharmaceuticals is outperform, with an average price target of $54.47.
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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.