The 10-second takeaway
For the quarter ended March 31 (Q1), Allergan beat slightly on revenues and met expectations on earnings per share.
Compared to the prior-year quarter, revenue grew. Non-GAAP earnings per share increased. GAAP earnings per share dropped significantly.
Gross margins expanded, operating margins dropped, net margins shrank.
Allergan reported revenue of $1.46 billion. The 20 analysts polled by S&P Capital IQ wanted to see revenue of $1.44 billion on the same basis. GAAP reported sales were the same as the prior-year quarter's.
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 $0.98. The 25 earnings estimates compiled by S&P Capital IQ predicted $0.97 per share. Non-GAAP EPS of $0.98 for Q1 were 14% higher than the prior-year quarter's $0.86 per share. GAAP EPS of $0.04 for Q1 were 95% lower than the prior-year quarter's $0.74 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 86.3%, 40 basis points better than the prior-year quarter. Operating margin was 25.7%, 50 basis points worse than the prior-year quarter. Net margin was 0.9%, much worse than the prior-year quarter. (Margins calculated in GAAP terms.)
Next quarter's average estimate for revenue is $1.57 billion. On the bottom line, the average EPS estimate is $1.22.
Next year's average estimate for revenue is $6.15 billion. The average EPS estimate is $4.76.
The stock has a three-star rating (out of five) at Motley Fool CAPS, with 414 members out of 439 rating the stock outperform, and 25 members rating it underperform. Among 118 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 115 give Allergan a green thumbs-up, and three give it a red thumbs-down.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Allergan is outperform, with an average price target of $114.06.
- Add Allergan 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. 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.