Forest Laboratories Inc. Earnings Cheat Sheet: Profit Drop Breaks Four Consecutive Quarters of Growing Profits

S&P 500 (NYSE:SPY) component Forest Laboratories Inc. (NYSE:FRX) reported its results for the second quarter. Forest Laboratories and its subsidiaries develop, manufacture and sell prescription drug products.

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Forest Laboratories Earnings Cheat Sheet for the Second Quarter

Results: Net income for the drug manufacturer fell to $249.8 million (91 cents per share) vs. $286.1 million ($1 per share) a year earlier. This is a decline of 12.7% from the year earlier quarter.

Revenue: Rose 7.4% to $1.17 billion from the year earlier quarter.

Actual vs. Wall St. Expectations: FRX fell short of the mean analyst estimate of 98 cents per share. Analysts were expecting revenue of $1.16 billion.

Quoting Management: Howard Solomon, Chairman and Chief Executive Officer of Forest, said: “We are pleased with our new product launches for Daliresp and Viibryd and with the continued positive progress of our late stage new product development pipeline. We officially introduced Daliresp and Viibryd in August following our first-ever launch of two products at the same national sales meeting for all of our salesforces. It is still early days for both products but they are performing well in-line with our expectations. We also continue to see solid performance for Bystolic, Savella and Teflaro.”

Key Stats:

Last quarter’s profit decrease breaks a streak of four consecutive quarters of year-over-year profit increases. In the first quarter, net income rose more than twofold from the year earlier, while the figure increased 1327.4% in the fourth quarter of the last fiscal year, 52.5% in the third quarter of the last fiscal year and 53.3% in the second quarter of the last fiscal year.

Revenue has risen the past four quarters. Revenue increased 8.2% to $1.15 billion in the first quarter. The figure rose 12.7% in the fourth quarter of the last fiscal year from the year earlier and climbed 5.9% in the third quarter of the last fiscal year from the year-ago quarter.

The company fell short of forecasts after beating estimates in the previous two quarters. In the first quarter, it topped the mark by 8 cents, and in the fourth quarter of the last fiscal year, it was ahead by 4 cents.

Margins rose in the first quarter after falling the quarter before. Gross margin rose 0.2 percentage point to 77.4% from the quarter earlier quarter. In the fourth quarter of the last fiscal year, the figure rose 0.3 percentage point to 77.9% from the year earlier quarter.

Looking Forward: The outlook for the company’s results in the upcoming quarter is unfavorable. The average estimate for the third quarter is $1 per share, down from $1.01 ninety days ago. For the fiscal year, the average estimate has moved up from $3.68 a share to $3.73 over the last ninety days.

Competitors to Watch: Johnson & Johnson (NYSE:JNJ), AstraZeneca plc (NYSE:AZN), Lannett Company, Inc. (AMEX:LCI), Watson Pharmaceuticals, Inc. (NYSE:WPI), Mylan Inc. (NASDAQ:MYL), Pfizer Inc. (NYSE:PFE), Abbott Laboratories (NYSE:ABT), Impax Laboratories, Inc. (NASDAQ:IPXL), Par Pharmaceutical Companies, Inc. (NYSE:PRX), and Jazz Pharmaceuticals, Inc. (NASDAQ:JAZZ).

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(Source: Xignite Financials)

 

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