This post describes our model of Watson Pharmaceuticals' (NYSE: WPI
) Income Statement for the second quarter of 2010, which will end on 30 June.
The purpose of the model is to establish a baseline for identifying surprises, positive or negative, in the quarterly results the company will report. Estimates for each line of the Income Statement
are derived from management's guidance, the company's historical financial results, and other publicly available data.
We begin by reviewing background information about Watson and the business environment in which it is currently operating.
Watson Pharmaceuticals, Inc., produces and distributes generic
and, to a lesser extent, branded
Watson earned $222 million in 2009
on revenue of $2.8 billion. The corresponding figures for 2008 were $238 million and $2.5 billion.
The company's current market capitalization
is approximately $5.5 billion.