The 10-second takeaway
For the quarter ended June 30 (Q2), Actavis met expectations on revenues and met expectations on earnings per share.
Compared to the prior-year quarter, revenue grew significantly. Non-GAAP earnings per share grew significantly. GAAP loss per share grew.
Gross margins grew, operating margins dropped, net margins dropped.
Actavis reported revenue of $1.99 billion. The 15 analysts polled by S&P Capital IQ anticipated sales of $1.99 billion on the same basis. GAAP reported sales were 47% higher than the prior-year quarter's $1.36 billion.
EPS came in at $2.01. The 19 earnings estimates compiled by S&P Capital IQ anticipated $2.00 per share. Non-GAAP EPS of $2.01 for Q2 were 42% higher than the prior-year quarter's $1.42 per share. GAAP EPS were -$4.27 for Q2 compared to -$0.49 per share for the prior-year quarter.
For the quarter, gross margin was 47.2%, 280 basis points better than the prior-year quarter. Operating margin was 9.7%, 540 basis points worse than the prior-year quarter. Net margin was -28.4%, much worse than the prior-year quarter. (Margins calculated in GAAP terms.)
Next quarter's average estimate for revenue is $2.05 billion. On the bottom line, the average EPS estimate is $2.11.
Next year's average estimate for revenue is $8.06 billion. The average EPS estimate is $8.32.
The stock has a three-star rating (out of five) at Motley Fool CAPS, with 230 members out of 251 rating the stock outperform, and 21 members rating it underperform. Among 94 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 90 give Actavis a green thumbs-up, and four give it a red thumbs-down.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Actavis is outperform, with an average price target of $140.83.
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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.