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Tickers in this Article: AGN
Allergan (NYSE:AGN) announced its results for the most recent quarter on August 1, 2012. 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.

Earnings play an important role in measuring the appropriate valuation for a stock. Investors should be cautious if the company's stock price is high but it consistently has low earnings. SEE: Can Earnings Guidance Accurately Predict The Future?

The Numbers: Allergan fell short of estimates with 96 cents per share and revenues of $1.47 billion. Analysts were expecting $1.06 per share and revenues of $1.51 billion. EPS rose 21.5% while revenue climbed 3.5% from the same period last year. Allergan's revenue has grown during each of the past four quarters on a year-over-year basis. Allergan's profit rose 19.8% from last year's figures to $295.4 million during the second quarter.

Management Quote: "In the second quarter, Allergan continued to deliver strong earnings growth in spite of the strong U.S. Dollar relative to virtually all major currencies," said David E.I. Pyott, Allergan's Chairman of the Board, President and Chief Executive Officer. "In addition, we continue to focus on identifying efficiencies so that we can continue to invest strongly in R&D to drive innovation."

Looking Ahead: Next quarter's results are expected to be more favorable for the company. Over the past 60 days, the average estimate for the third quarter has reached $1.06 per share, up from $1.05. When analyst increase earnings estimates investors can assume business has been stronger than first thought and is an encouraging sign for investors. Over the past 60 days, the average estimate for the fiscal year has reached $4.17 per share, a decline from $4.18.

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