King Pharmaceuticals (KG), Inc is scheduled to report its fiscal third quarter 2009 financial results on Thursday, November 5, 2009.
King Pharmaceuticals reported total revenues of $445 million during the second quarter ended June 30, 2009, compared to $397 million in the second quarter of 2008. The company reported a net income of $38 million and diluted earnings per share of $0.15 during the second quarter of 2009, compared to net income of $41 million and diluted earnings per share of $0.17 in the second quarter of the prior year.
Analysts' estimates for the quarter ending September 2009 (Q3) range from a low of $0.22 to a high of $0.33, with a consensus of $0.2694. For the fiscal quarter ending September 2009, the consensus EPS forecast has remained the same over the past week at $0.269 and decreased over the past month from $0.272 to $0.269 (-1.10%). Of the 15 analysts making quarterly forecasts, 1 raised and 1 lowered their forecast.
Upward revision in the Analysts' consensus earnings estimate is attributable to the approval and launch of Embeda, a rebound in animal health trends and the Alpharma acquisition (completed on December 29, 2008). However, King's existing pipeline especially from Altace which is now off –patent remains a weakness.
Third quarter 2009, net revenue from our Branded Pharmaceuticals segment could be in the range of $265 million to $285 million. Second quarter saw three consecutive months of TRX growth with a record number 76,000 TRXs in June. TRX growth should have continued in the third quarter as well. However, sales of Thrombin-JMI should have contracted in Q3.
Although gross margin during the second quarter slightly exceeded the company's full-year forecast, I forecast a gross margin of 65% for the full year. In the third quarter, SG&A expense is expected to have increased in the third quarter and likely to continue to increase in fourth quarter due to the launch of Embeda. However, these costs could be offset by synergies through its pharma integration process.
For the fiscal year ending December 2009, forecast has remained the same over the past week at $1.078 and decreased over the past month from $1.085 to $1.078 (-0.65%). Of the 15 analysts making yearly forecasts, 2 raised and 2 lowered their forecast. The resubmission of REMOXY New Drug Application (NDA) which is likely to occur mid-year 2010 could be a positive prospect.
The company's stock closed Wednesday at $10.19, compared to the 52 week range of $5.86 and $11.36. The stock seems to be trading at appropriate levels.
