For the most part, a company actually missing estimates on an operating basis and significantly increasing estimated expenses for the next year is enough to drive the stock down. Salix Pharmaceuticals (SLXP) is not an ordinary stock, though, and investors seem happy to look past the near-term turbulence in favor of the long-term opportunity in this focused specialty pharmaceutical company.
A Mixed End To The Fiscal Year
To its credit, if there's a good way to miss earnings, Salix pretty much found it. Revenue rose over 30% for the quarter (with sales of lead drug Xifaxan up 29%) and gross margins were flat. That the company exceeded estimates for SG&A spending and missed sell-side analyst estimates for operating income by about 10% was pretty much moot against the 40% overall growth and the ongoing momentum in its class-leading drug.
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What's It Going To Take To Get Salix Cheap?
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