The 10-second takeaway
For the quarter ended March 31 (Q1), Salix Pharmaceuticals missed estimates on revenues and missed estimates on earnings per share.
Compared to the prior-year quarter, revenue increased significantly. Non-GAAP earnings per share contracted. GAAP earnings per share grew significantly.
Margins expanded across the board.
Salix Pharmaceuticals reported revenue of $202.6 million. The 16 analysts polled by S&P Capital IQ expected to see sales of $206.9 million on the same basis. GAAP reported sales were 18% higher than the prior-year quarter's $171.1 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 $0.63. The 16 earnings estimates compiled by S&P Capital IQ anticipated $0.67 per share. Non-GAAP EPS of $0.63 for Q1 were 6.0% lower than the prior-year quarter's $0.67 per share. GAAP EPS of $0.35 for Q1 were 133% higher than the prior-year quarter's $0.15 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 83.7%, 370 basis points better than the prior-year quarter. Operating margin was 25.6%, 310 basis points better than the prior-year quarter. Net margin was 11.1%, 530 basis points better than the prior-year quarter. (Margins calculated in GAAP terms.)
Next quarter's average estimate for revenue is $226.1 million. On the bottom line, the average EPS estimate is $0.81.
Next year's average estimate for revenue is $923.8 million. The average EPS estimate is $3.44.
The stock has a three-star rating (out of five) at Motley Fool CAPS, with 126 members out of 149 rating the stock outperform, and 23 members rating it underperform. Among 49 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 43 give Salix Pharmaceuticals a green thumbs-up, and six 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 $56.17.
- Add Salix Pharmaceuticals 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.