Forest Labs Second Quarter Earnings Sneak Peek

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S&P 500 (NYSE:SPY) component Forest Labs (NYSE:FRX) will unveil its latest earnings on Tuesday, October 16, 2012. Forest Laboratories and its subsidiaries develop, manufacture and sell prescription drug products.

Forest Labs Earnings Preview Cheat Sheet

Wall St. Earnings Expectations: The average estimate of analysts is for net income of 2 cents per share, a decline of 97.8% from the company’s actual earnings for the same quarter a year ago. During the past three months, the average estimate has moved down from 6 cents. Between one and three months ago, the average estimate moved down. It also has dropped from 5 cents during the last month. Analysts are projecting profit to rise by 82.5% versus last year to 68 cents.

Past Earnings Performance: The company missed estimates last quarter after beating forecasts in the prior two. In the first quarter, the company reported profit of 21 cents per share versus a mean estimate of net income of 25 cents per share. In the fourth quarter of the last fiscal year, the company beat estimates by 7 cents.

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A Look Back: In the first quarter, profit fell 78.6% to $55.3 million (21 cents a share) from $258.1 million (90 cents a share) the year earlier, missing analyst expectations. Revenue fell 28.4% to $821.1 million from $1.15 billion.

Wall St. Revenue Expectations: Analysts predict a decline of 33.8% in revenue from the year-earlier quarter to $774 million.

Stock Price Performance: Between August 14, 2012 and October 10, 2012, the stock price had risen $2.42 (7.1%), from $33.98 to $36.40. The stock price saw one of its best stretches over the last year between August 15, 2012 and August 28, 2012, when shares rose for 10 straight days, increasing 2.5% (+86 cents) over that span. It saw one of its worst periods between July 17, 2012 and July 25, 2012 when shares fell for seven straight days, dropping 6.7% (-$2.39) over that span.

Key Stats:

On the top line, the company is hoping to use this earnings announcement to snap a string of two-straight quarters of revenue declines. Revenue fell 6.7% in the fourth quarter of the last fiscal year and dropped again in the first quarter.

The company is trying to stem some negative momentum heading into this earnings announcement. Profit has dropped by a year-over-year average of 36.2% over the past four quarters.

Analyst Ratings: There are mostly holds on the stock with 13 of 22 analysts surveyed giving that rating.

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

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