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S&P 500 (NYSE:SPY) component Watson Pharmaceuticals, Inc. (NYSE:WPI) will unveil its latest earnings on Thursday, July 26, 2012. Watson Pharmaceuticals develops, manufactures, markets, sells and distributes pharmaceutical products.
Watson Pharmaceuticals, Inc. Earnings Preview Cheat Sheet
Wall St. Earnings Expectations: The average analyst estimate is for net income of $1.38 per share, a rise of 36.6% from the company’s actual earnings for the year-ago quarter. During the past three months, the average estimate has moved down from $1.40. Between one and three months ago, the average estimate moved down. It also has dropped from $1.39 during the last month. Analysts are projecting profit to rise by 20.5% versus last year to $5.75.
Past Earnings Performance: The company has beaten estimates the last four quarters and is coming off a quarter where it topped forecasts by 4 cents, reporting profit of $1.64 per share against a mean estimate of net income of $1.60 per share.
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Wall St. Revenue Expectations: Analysts are projecting a rise of 25% in revenue from the year-earlier quarter to $1.35 billion.
A Look Back: In the first quarter, profit rose 21% to $54.8 million (43 cents a share) from $45.3 million (36 cents a share) the year earlier, exceeding analyst expectations. Revenue rose 73.9% to $1.52 billion from $876.5 million.
Stock Price Performance: From June 21, 2012 to July 20, 2012, the stock price rose $6.27 (9%), from $69.54 to $75.81. The stock price saw one of its best stretches over the last year between June 26, 2012 and July 5, 2012, when shares rose for seven straight days, increasing 6.3% (+$4.45) 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, dropping 8% (-$5.67) over that span.
The company enters this earnings announcement with substantial revenue momentum. The company has averaged year-over-year revenue growth of 45.5% over the last four quarters.
After experiencing income increases the last three quarters, the company is hoping to keep the good news coming with this earnings announcement. Net income rose more than twofold in the third quarter of the last fiscal year and more than fivefold in the fourth quarter of the last fiscal year before increasing again in the first quarter.
Balance Sheet Analysis: The company’s current ratio of assets to liabilities came in at 1.53 last quarter. The current ratio is an indication of a firm’s liquidity and ability to meet creditor demands and generally, for every dollar the company owes in the short term, it has that figure available in assets that can be converted to cash in the short term.
Analyst Ratings: With 16 analysts rating the stock a buy, none rating it a sell and five rating the stock a hold, there are indications of a bullish stance by analysts.
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(Company fundamentals by Xignite Financials. Earnings estimates provided by Zacks)
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