Watson Pharmaceuticals Inc. Third Quarter Earnings on Deck

S&P 500 (NYSE:SPY) component Watson Pharmaceuticals, Inc. (NYSE:WPI) will unveil its latest earnings on Tuesday, November 1, 2011. Watson Pharmaceuticals develops, manufactures, markets, sells and distributes pharmaceutical products.

Watson Pharmaceuticals, Inc. Earnings Preview Cheat Sheet

Wall St. Earnings Expectations: The average estimate of analysts is for profit of $1.05 per share, a rise of 23.5% from the company’s actual earnings for the same quarter a year ago. During the past three months, the average estimate has moved up from $1.03. Between one and three months ago, the average estimate moved up. It has risen from $1.04 during the last month. For the year, analysts are projecting net income of $4.48 per share, a rise of 38.3% from last year.

Past Earnings Performance: The company is looking to top estimates for the third straight quarter. Last quarter, it reported profit of $1.01 per share against a mean estimate of net income of $1, and the quarter before, the company exceeded forecasts by 3 cents with profit of 89 cents versus a mean estimate of net income of 86 cents.

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Wall St. Revenue Expectations: On average, analysts predict $1.09 billion in revenue this quarter, a rise of 23.5% from the year ago quarter. Analysts are forecasting total revenue of $4.5 billion for the year, a rise of 26.1% from last year’s revenue of $3.57 billion.

Analyst Ratings: Analysts are bullish on Watson Pharmaceuticals as 10 analysts rate it as a buy, none rate it as a sell and 10 rate it as a hold.

A Look Back: In the second quarter, profit fell 25.4% to $52.7 million (42 cents a share) from $70.6 million (57 cents a share) the year earlier, but exceeded analyst expectations. Revenue rose 23.6% to $1.08 billion from $875.3 million.

Key Stats:

Revenue has risen the past four quarters. Revenue rose 2.3% in the first quarter from the year earlier, climbed 21.3% in the fourth quarter of the last fiscal year from the year-ago quarter and 33.3% in the third quarter of the last fiscal year.

While the company has been profitable for the last eight quarters, income has fallen year over year by an average of 46.9% over the past four quarters. The quarter hit the hardest was the fourth quarter of the last fiscal year, that saw a 67.8% drop.

Competitors to Watch: Mylan Inc. (NASDAQ:MYL), Novartis AG (NYSE:NVS), Par Pharmaceutical Companies, Inc. (NYSE:PRX), Pfizer Inc. (NYSE:PFE), Impax Laboratories, Inc. (NASDAQ:IPXL), Lannett Company, Inc. (AMEX:LCI), Teva Pharmaceutical Industries Ltd (NASDAQ:TEVA), Columbia Laboratories Inc. (NASDAQ:CBRX), Perrigo Company (NASDAQ:PRGO), and Johnson & Johnson (NYSE:JNJ).

Stock Price Performance: During August 2, 2011 to October 26, 2011, the stock price had risen $5.71 (8.8%) from $64.81 to $70.52. The stock price saw one of its best stretches over the last year between September 12, 2011 and September 20, 2011 when shares rose for seven-straight days, rising 9.6% (+$6.31) over that span. It saw one of its worst periods between July 22, 2011 and August 2, 2011 when shares fell for eight-straight days, falling 8% (-$5.67) over that span. Shares are up $18.87 (+36.5%) year to date.

(Source: Xignite Financials)

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