The 10-second takeaway
For the quarter ended Dec. 31 (Q4), Warner Chilcott beat expectations on revenues and crushed expectations on earnings per share.
Compared to the prior-year quarter, revenue contracted. Non-GAAP earnings per share contracted. GAAP earnings per share grew significantly.
Gross margins contracted, operating margins expanded, net margins expanded.
Warner Chilcott booked revenue of $612.0 million. The 13 analysts polled by S&P Capital IQ hoped for a top line of $565.2 million on the same basis. GAAP reported sales were 5.2% lower than the prior-year quarter's $645.8 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 $0.91. The 17 earnings estimates compiled by S&P Capital IQ anticipated $0.72 per share. Non-GAAP EPS of $0.91 for Q4 were 4.2% lower than the prior-year quarter's $0.95 per share. GAAP EPS of $0.49 for Q4 were 40% higher than the prior-year quarter's $0.35 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 85.3%, 300 basis points worse than the prior-year quarter. Operating margin was 29.2%, 70 basis points better than the prior-year quarter. Net margin was 20.3%, 630 basis points better than the prior-year quarter.
Next quarter's average estimate for revenue is $586.5 million. On the bottom line, the average EPS estimate is $0.81.
Next year's average estimate for revenue is $2.35 billion. The average EPS estimate is $3.28.
The stock has a three-star rating (out of five) at Motley Fool CAPS, with 161 members out of 190 rating the stock outperform, and 29 members rating it underperform. Among 57 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 50 give Warner Chilcott a green thumbs-up, and seven give it a red thumbs-down.
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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 position in any of the stocks mentioned. 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.