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Allergan Second Quarter Earnings Preview
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AGN
Allergan (NYSE:AGN) is expected to report increased earnings when it releases its second quarter results on Wednesday, August 1, 2012. The consensus estimate is anticipating a profit of $1.06 a share, an increase from last year's 96 cents per share.
A business' earnings are the main determinant of its share price because earnings and the circumstances relating to them can indicate whether the business will be profitable and successful in the long run. SEE: Can Earnings Guidance Accurately Predict The Future?
What to Expect: Analysts are expecting Allergan to report earnings of $1.06 per share, up 10.4% from a year ago, when the company reported earnings of 96 cents per share.
The consensus estimate hasn't changed in the last month, but it has dropped from $1.08 three months ago. For the fiscal year, analysts are expecting earnings of $4.17 per share.
Revenue is expected to exceed last year's figure of $1.42 billion by 5.8% and come in at $1.5 billion for the quarter. Allergan is expected to report revenue of $5.86 billion for the fiscal year.
Company Performance: These last four quarters have marked revenue growth. It rose 9.5% in the first quarter, 7.1% in the fourth quarter of the last fiscal year, 9.9% in the third quarter of the last fiscal year and 13.6% in the second quarter of the last fiscal year.
Compared to the industry average of 13.81, AGN's P/E ratio of 26.6 is quite high. A company with a high P/E ratio will eventually have to live up to the high rating by substantially increasing its earnings, or the price will need to drop. Perhaps one of the most widely-used stock analysis tools is the price-to-earnings ratio, or P/E. To determine the P/E ratio, an investor divides the market price of the stock by the earnings-per-share (EPS) of the stock. SEE: Investment Valuation Ratios: Price/Earnings Ratio
The stock price has fallen 10.5% to $86.25 from $96.39 since May 1, 2012. The stock saw one of its worst stretches when its price fell $6.22 per share between July 3, 2012 and July 11, 2012.
The Competition: Allergan is a global specialty health care company. It discovers, develops, and commercializes innovative pharmaceuticals, biologics, and medical devices, as well as over-the-counter products. Analysts are optimistic about Allergan, with 14 of 23 assigning it a buy rating. The rating has remained steadfast for the past three months.
The company's closest competitor in the biotechnology and drugs industry is Johnson & Johnson (JNJ). Analysts are more optimistic about Allergan than about Johnson & Johnson. Only 15 out of 23 analysts rate the latter a buy.
A business' earnings are the main determinant of its share price because earnings and the circumstances relating to them can indicate whether the business will be profitable and successful in the long run. SEE: Can Earnings Guidance Accurately Predict The Future?
What to Expect: Analysts are expecting Allergan to report earnings of $1.06 per share, up 10.4% from a year ago, when the company reported earnings of 96 cents per share.
The consensus estimate hasn't changed in the last month, but it has dropped from $1.08 three months ago. For the fiscal year, analysts are expecting earnings of $4.17 per share.
Revenue is expected to exceed last year's figure of $1.42 billion by 5.8% and come in at $1.5 billion for the quarter. Allergan is expected to report revenue of $5.86 billion for the fiscal year.
Company Performance: These last four quarters have marked revenue growth. It rose 9.5% in the first quarter, 7.1% in the fourth quarter of the last fiscal year, 9.9% in the third quarter of the last fiscal year and 13.6% in the second quarter of the last fiscal year.
The stock price has fallen 10.5% to $86.25 from $96.39 since May 1, 2012. The stock saw one of its worst stretches when its price fell $6.22 per share between July 3, 2012 and July 11, 2012.
The Competition: Allergan is a global specialty health care company. It discovers, develops, and commercializes innovative pharmaceuticals, biologics, and medical devices, as well as over-the-counter products. Analysts are optimistic about Allergan, with 14 of 23 assigning it a buy rating. The rating has remained steadfast for the past three months.
The company's closest competitor in the biotechnology and drugs industry is Johnson & Johnson (JNJ). Analysts are more optimistic about Allergan than about Johnson & Johnson. Only 15 out of 23 analysts rate the latter a buy.
by
Investopedia Staff
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