Watson Pharma Earnings: Double-Digit Revenue Growth Continues

S&P 500 (NYSE:SPY) component Watson Pharmaceuticals Inc. (NYSE:WPI) reported its results for the third quarter. Watson Pharmaceuticals develops, manufactures, markets, sells and distributes pharmaceutical products.

Earnings season is back and more important than ever. Get our newest CHEAT SHEET stock picks now

Watson Pharmaceuticals Inc. Earnings Cheat Sheet

Results: Net income for Watson Pharmaceuticals Inc. rose to $76.7 million (60 cents per share) vs. $68.1 million (54 cents per share) in the same quarter a year earlier. This marks a rise of 12.6% from the year-earlier quarter.

Revenue: Rose 18.8% to $1.29 billion from the year-earlier quarter.

Actual vs. Wall St. Expectations: Watson Pharmaceuticals Inc. reported adjusted net income of $1.35 per share. By that measure, the company beat the mean estimate of $1.29 per share. It fell short of the average revenue estimate of $1.35 billion.

Quoting Management: President and CEO. “We are very pleased that as we transition from Watson stand-alone to a larger company following the Actavis acquisition, we have demonstrated outstanding execution of our 2012 business plan. We delivered this performance while we simultaneously focused on integration planning and are now ready to capitalize on our objectives for uniting Watson and Actavis, and creating a larger, more powerful global competitor.”

Key Stats:

For the past five quarters, the company has seen double-digit year-over-year percentage revenue growth. Over that span, the company has averaged growth of 40.5%, with the biggest boost coming in the first quarter when revenue rose 73.9% from the year earlier quarter.

The company has now surpassed analyst estimates for four quarters in a row. It beat the mark by 4 cents in the second quarter, by 4 cents in the first quarter, and by 2 cents in the fourth quarter of the last fiscal year.

The company reported a profit last quarter after being in the red the prior quarter. In the first quarter, the company booked a net loss of $54.8 million, or a loss of 43 cents per share.

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 $1.42 a share to $1.50 over the last thirty days. For the fiscal year, the average estimate has moved up from $5.75 a share to $5.84 over the last sixty days.

Stocks with improving earnings metrics are worthy of your extra attention. In fact, “E = Earnings Are Increasing Quarter-Over-Quarter” is a core component of our CHEAT SHEET investing framework for this very reason. Don’t waste another minute — click here and get our CHEAT SHEET stock picks now.

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

Don’t Miss These Additional Hot Stories:

Is Ford’s Stock a Buy After a Record Quarter?

Will Sirius’s Stock Still Be a Buy After the Buyout?

Is Facebook Harmful to Your Health and Wallet?

More from The Cheat Sheet