Allergan may run what many view as a skin-deep business, but investors had to read much deeper than the headline number if they wanted an accurate look at the company’s most recent earnings.
Probably most famous for its wrinkle fighter Botox, this medical-aesthetics company missed analysts’ earnings estimates by a penny a share. Beyond that one number, though, was what Cramer described as “a pretty darned good quarter.”
Sales, up 6.9 percent, were better than expected, product performance was strong, and so was the company’s outlook for product sales. The miss was a simple product of general and administrative spending, a higher tax rate and an increased share count.
“Nothing to get worked up about,” Cramer said.
His reasons for liking this stock, the rise in vanity spending as the economy rebounds and additional regulatory approval for its products—Botox is used to treat migraine headaches now—haven’t changed since Cramer first recommended it back in February 2009. AGN is up 76 percent since then, and he still thinks the stock is a buy.
But how will Allergan continue to continue for consumers and investors alike? Watch the video for Cramer’s interview with CEO David Pyott.
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