The 10-second takeaway
For the quarter ended Sep. 30 (Q3), Salix Pharmaceuticals met expectations on revenues and crushed expectations on earnings per share.
Compared to the prior-year quarter, revenue increased significantly and GAAP earnings per share dropped significantly.
Gross margins expanded, operating margins shrank, net margins shrank.
Salix Pharmaceuticals chalked up revenue of $185.1 million. The 18 analysts polled by S&P Capital IQ expected net sales of $187.2 million on the same basis. GAAP reported sales were 27% higher than the prior-year quarter's $146.2 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 $0.95. The 15 earnings estimates compiled by S&P Capital IQ anticipated $0.69 per share. GAAP EPS of $0.26 for Q3 were 53% lower than the prior-year quarter's $0.55 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 85.7%, 210 basis points better than the prior-year quarter. Operating margin was 28.6%, 770 basis points worse than the prior-year quarter. Net margin was 8.9%, 1,450 basis points worse than the prior-year quarter.
Next quarter's average estimate for revenue is $200.1 million. On the bottom line, the average EPS estimate is $0.75.
Next year's average estimate for revenue is $738.9 million. The average EPS estimate is $2.89.
The stock has a three-star rating (out of five) at Motley Fool CAPS, with 129 members out of 153 rating the stock outperform, and 24 members rating it underperform. Among 50 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 43 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 $54.73.
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