Earnings Preview: Allergan

Allergan, Inc. (AGN - Analyst Report) is scheduled to announce its fourth quarter and full year 2011 results on February 2, 2012, before the opening bell. The Zacks Consensus Estimate for the fourth quarter is $1.00 (year-over-year increase of 13.6%) on revenues of $1,408 million (year-over-year increase of 7.6%). This is just above the company’s fourth quarter guidance of 97-99 cents per share.

As per the Zacks Consensus Estimate, for fiscal 2011, earnings are expected to be $3.64 (year-over-year increase of 15.2%) on revenues of $5,420 million (year-over-year increase of 11.0%). The Zacks Consensus Estimate for 2011 is at the high end of the guidance range of $3.62–$3.64 per share provided by the company.

Third Quarter Recap

Allergan reported third quarter 2011 earnings of 92 cents per share, a penny above the Zacks Consensus Estimate and a few cents above the guidance range of 88–90 cents. Earnings increased 17.9% from the year-ago quarter.

Third quarter revenues increased 9.9% to $1,328 million, in line with the Zacks Consensus Estimate. Specialty pharmaceuticals sales increased 10.1% to $1,089.7 million, with eye care pharmaceutical sales increasing 7.5%. Products like Lumigan and Restasis helped drive eye care sales. A detailed discussion of third quarter results is available here.

Agreement and Magnitude of Estimate Revisions

Of the 23 analysts following the stock, 1 analyst revised the fourth quarter estimate upward and 1 trimmed the estimate in the last 30 days. There were no revisions during the last 7 days. For full year 2011, 1 out of 25 analysts slashed the estimate in the past 30 days, with 1 upside revision in the same period. None of the analysts revised their 2011 estimates in the last 7 days.     

With no significant movement in estimate revisions, the Zacks Consensus Estimate for the fourth quarter of 2011 as well as the full year remains unchanged at $1.00 and $3.64, respectively.

Surprise History

Allergan has surpassed earnings estimates in three of the last four quarters. The company recorded a minimum surprise of negative 1.12% in the fourth quarter of 2010 to a maximum of 4.05% in the first quarter of 2011. On an average, the earnings surprise stood at 1.55%. Fourth quarter 2011 earnings are expected to come in-line with expectations.

Our Recommendation

We currently have a Neutral recommendation on Allergan, which carries a Zacks #3 Rank (short-term Hold rating).

Read the full analyst report on AGN