The 10-second takeaway
For the quarter ended June 30 (Q2), Allergan beat expectations on revenues and beat slightly on earnings per share.
Compared to the prior-year quarter, revenue grew. Non-GAAP earnings per share grew. GAAP earnings per share expanded significantly.
Margins expanded across the board.
Allergan chalked up revenue of $1.60 billion. The 21 analysts polled by S&P Capital IQ looked for a top line of $1.56 billion on the same basis. GAAP reported sales were 7.1% higher than the prior-year quarter's $1.49 billion.
Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures are normalized by S&P Capital IQ and may vary to maintain comparability with normalized estimates.
EPS came in at $1.22. The 26 earnings estimates compiled by S&P Capital IQ forecast $1.20 per share. Non-GAAP EPS of $1.22 for Q2 were 14% higher than the prior-year quarter's $1.07 per share. GAAP EPS of $1.19 for Q2 were 24% higher than the prior-year quarter's $0.96 per share.
Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures are normalized by S&P Capital IQ and may vary to maintain comparability with normalized estimates.
For the quarter, gross margin was 87.5%, 100 basis points better than the prior-year quarter. Operating margin was 30.9%, 50 basis points better than the prior-year quarter. Net margin was 22.5%, 270 basis points better than the prior-year quarter. (Margins calculated in GAAP terms.)
Next quarter's average estimate for revenue is $1.52 billion. On the bottom line, the average EPS estimate is $1.21.
Next year's average estimate for revenue is $6.17 billion. The average EPS estimate is $4.75.
The stock has a four-star rating (out of five) at Motley Fool CAPS, with 419 members out of 443 rating the stock outperform, and 24 members rating it underperform. Among 119 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 116 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 $106.52.
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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. 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.