Can Investors Warm To Warner Chilcott?

Although investors have been willing to give a bit of a valuation break to some deserving large-cap European pharmaceutical companies, Ireland's Warner Chilcott (Nasdaq:WCRX) is not in that group. While the company has a host of challenges to surmount (some of which are self-inflicted), investors may nevertheless find it worthwhile to hit the books on this specialty pharmaceutical company. 

The Quarter That Was


Overall, Warner Chilcott's third quarter earnings were positive, but with some spots of concern. Right off the bat, the company missed the average analyst guess by a considerable margin. WCRX reported that sales were up 178% to $703 million, about 6% below the $750 million target (to say nothing of the optimistic $823 million high estimate).

Without the enormous impact of the drugs acquired from Procter & Gamble (NYSE:PG), which amounted to about $504 million, the company would have posted a 21% revenue decline. That number also includes the impact of a significant change in the dermatology business, though, so on a true like-for-like basis, revenue would have been up more than 10% (led by the oral contraceptive business).


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