The 10-second takeaway
For the quarter ended June 30 (Q2), Warner Chilcott beat expectations on revenues and crushed expectations on earnings per share.
Compared to the prior-year quarter, revenue dropped and GAAP earnings per share shrank significantly.
Gross margins improved, operating margins grew, net margins dropped.
Warner Chilcott logged revenue of $638.0 million. The 15 analysts polled by S&P Capital IQ predicted sales of $604.9 million on the same basis. GAAP reported sales were 4.8% lower than the prior-year quarter's $670.3 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 $1.03. The 18 earnings estimates compiled by S&P Capital IQ averaged $0.79 per share. GAAP EPS of $0.21 for Q2 were 25% lower than the prior-year quarter's $0.28 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 89.0%, 410 basis points better than the prior-year quarter. Operating margin was 38.9%, 1,660 basis points better than the prior-year quarter. Net margin was 8.3%, 240 basis points worse than the prior-year quarter.
Next quarter's average estimate for revenue is $593.3 million. On the bottom line, the average EPS estimate is $0.76.
Next year's average estimate for revenue is $2.48 billion. The average EPS estimate is $3.65.
The stock has a two-star rating (out of five) at Motley Fool CAPS, with 138 members out of 167 rating the stock outperform, and 29 members rating it underperform. Among 48 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 40 give Warner Chilcott a green thumbs-up, and eight give it a red thumbs-down.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Warner Chilcott is outperform, with an average price target of $24.29.
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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. The Motley Fool has no positions in the stocks mentioned above. 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.