Cubist Pharmaceuticals Earnings: Beats Expectations

Cubist Pharmaceuticals Inc. (NASDAQ:CBST) reported net income above Wall Street’s expectations for the third quarter. Cubist Pharmaceuticals is focused on the research, development, and commercialization of pharmaceutical products that address unmet medical needs in the acute care environment.

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Cubist Pharmaceuticals Inc. Earnings Cheat Sheet

Results: Net income for Cubist Pharmaceuticals Inc. rose to $40.3 million (55 cents per share) vs. $24.2 million (33 cents per share) in the same quarter a year earlier. This marks a rise of 66.4% from the year-earlier quarter.

Revenue: Rose 18.1% to $238.2 million from the year-earlier quarter.

Actual vs. Wall St. Expectations: Cubist Pharmaceuticals Inc. reported adjusted net income of 68 cents per share. By that measure, the company beat the mean estimate of 48 cents per share. It beat the average revenue estimate of $226.1 million.

Quoting Management: “2012 continues to position us well as we drive toward our Building Blocks of Growth five-year goals,” said Michael Bonney, CEO of Cubist. “Our market strength and experience, backed by solid business fundamentals, have allowed us to deliver another quarter of strong growth. With revenue growth of 18% and strong bottom line growth, we’re building on our momentum as we continue to deliver important products to our customers and drive value for our shareholders.”

Key Stats:

The company has enjoyed double-digit year-over-year percentage revenue growth for the past five quarters. Over that span, the company has averaged growth of 27%, with the biggest boost coming in the fourth quarter of the last fiscal year when revenue rose 31.6% from the year earlier quarter.

The company has now beaten estimates the last two quarters. In the second quarter, it topped expectations with net income of 45 cents versus a mean estimate of net income of 41 cents per share.

Gross margins widened last quarter, growing 0.6 percentage point from the year-earlier quarter to 76.6%. This snaps a streak of two consecutive quarters of shrinking margins.

Looking Forward: Analysts appear increasingly optimistic about the company’s results for the next quarter. The average estimate for the fourth quarter has moved up from 41 cents a share to 42 cents over the last sixty days. The average estimate for the fiscal year has risen to $1.69 per share from $1.67 in the past month.

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(Company fundamentals provided by Xignite Financials. Earnings estimates provided by Zacks)

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