Join        Login             Stock Quote

Salix Pharma (SLXP) Earnings Preview: Q4 Should Be Fine, 2012 Outlook Holds The Key

 February 24, 2012 03:33 PM

Salix Pharmaceuticals, Ltd. (NASDAQ:SLXP) is expected to report higher earnings and revenues when it reports its fourth-quarter results on Feb.27.

Wall Street expects the company to earn 96 cents a share, an increase of 45 percent from year-ago earnings of 66 cents a share. Analysts expect the company's quarterly revenue to grow 28.8 percent to $152.62 million, according to Thomson Reuters.

For the third quarter, the company reported earned $34.3 million or 55 cents a share, compared to a net loss of $2.7 million or 5 cents a share last year. Excluding items, it earned 77 cents a share. Total product revenue for the quarter rose to $146.2 million from $80.6 million a year ago.

[Related -Salix Pharmaceuticals, Ltd. (SLXP), Progenics Pharmaceuticals, Inc. (PGNX) Say FDA Committee To Review Relistor sNDA]

"while we're comfortable w/ Q4, consensus '12 numbers seem a bit high to us," Jefferies analyst Corey Davis wrote in a note to clients.

During the quarter, Salix completed its acquisition of privately-held Oceana Therapeutics and got two new products namely Solesta and Deflux. Solesta is being used to treat fecal incontinence, while Deflux is an alternative to major ureteral reimplantation surgery for the treatment of vesicoureteral reflux.

Meanwhile, the company's shares could move based on its guidance for 2012. The 2012 revenue is projected to be driven by Xifaxan, supported by Relistor, Solesta and Deflux. Analysts expect 2012 earnings of $2.74 a share on revenue of $728.71 million.

[Related -Salix Pharma (SLXP): FDA Approves Therapy For ART-Related Diarrhea In HIV Positive Patients]

"Should SLXP's 2012 outlook fail to bracket consensus, we think the stock could suffer. Given this scenario, we'd be buyers on weakness, as we're bullish on SLXP's prospects, especially given the emergence of a very credible pipeline," added Davis, who has a "buy" rating and $50 price target on Salix Pharma shares.

Davis said the the $50 price target represents 22 times the brokerage's 2012 EPS of $2.25, a premium price to earnings that would be justified given analyst's view that Salix Pharma could grow 20 percent plus over the next several years.

Salix Pharma focuses on treatment of gastrointestinal disorders. Its main product, Xifaxan, is an antibiotic currently approved for travelers' disease and hepatic encephalopathy (HE), which Jefferies estimate could be a $600 million plus revenue opportunity. Furthermore, Salix is seeking to expand the label of Xifaxan into IBS, which if approved, could be an additional $1 billion plus in potential revenue.



Comments Closed

rss feed

Latest Stories

article imageAutomating Ourselves To Unemployment

In this current era of central planning, malincentives abound. We raced to frack as fast we could for the read on...

article imageFed: Waiting For June… Or Godot?

The Federal Reserve left interest rates unchanged yesterday, as widely expected. But the possibility of a read on...

article imageThe Single Best Place To Invest Your Money For Retirement

It was never supposed to be this daunting. At least that's what we were read on...

article imageNegative Blowback From Negative Interest Rates

The Federal Reserve is widely expected to leave interest rates unchanged today. But perhaps standing pat read on...

Popular Articles

Daily Sector Scan
Partner Center

Fundamental data is provided by Zacks Investment Research, and Commentary, news and Press Releases provided by YellowBrix and Quotemedia.
All information provided "as is" for informational purposes only, not intended for trading purposes or advice. iStockAnalyst.com is not an investment adviser and does not provide, endorse or review any information or data contained herein.
The blog articles are opinions by respective blogger. By using this site you are agreeing to terms and conditions posted on respective bloggers' website.
The postings/comments on the site may or may not be from reliable sources. Neither iStockAnalyst nor any of its independent providers is liable for any informational errors, incompleteness, or delays, or for any actions taken in reliance on information contained herein. You are solely responsible for the investment decisions made by you and the consequences resulting therefrom. By accessing the iStockAnalyst.com site, you agree not to redistribute the information found therein.
The sector scan is based on 15-30 minutes delayed data. The Pattern scan is based on EOD data.