ARIAD Pharmaceuticals, Inc. Earnings Analysis: Q3, 2015 By the Numbers

ARIAD Pharmaceuticals, Inc. reports financial results for the quarter ended September 30, 2015.

ARIAD Pharmaceuticals, Inc. has an earnings momentum score of 37.53 and has a relative valuation rating of NEUTRAL.

Earnings Momentum Score

Highlights

  • Summary numbers: Revenues of USD 29.07 million, Net Earnings of USD -55.45 million, and Earnings per Share (EPS) of USD -0.29.
  • Gross margins narrowed from 95.95% to 87.13% compared to the same period last year, operating (EBITDA) margins now -182.73% from -321.03%.
  • Year-on-year change in operating cash flow of -16.22% is about the same as the change in earnings, likely no significant movement in accruals or reserves.
  • Earnings decline largely a result of non-operational activity, pretax margins improved from -340.24% to -210.85%.
  • Cash and Cash equivalents were up this period to 297.33 compared to 273.45 in the same period last year. Debt to Equity this period is compared to last period.

The table below shows the preliminary results and recent trends for key metrics such as revenues and net income growth:

2014-09-30 2014-12-31 2015-03-31 2015-06-30 2015-09-30
Relevant Numbers (Quarterly)
Revenues (mil) 14.68 66.84 23.99 29.24 29.07
Revenue Growth (%YOY) -12.25 700.13 103.62 141.36 98
Earnings (mil) -50.11 -5.75 -52.68 -63.16 -55.45
Earnings Growth (%YOY) 24.47 92.25 -5.73 -10.96 -10.66
Net Margin (%) -341.29 -8.6 -219.57 -216.02 -190.75
EPS -0.27 -0.03 -0.28 -0.33 -0.29
Return on Equity (%) -196.64 -28.42 -354.53 -2079.68 N/A
Return on Assets (%) -41.05 -4.23 -35.58 -44.98 -39.64

Access our Ratings and Scores for ARIAD Pharmaceuticals, Inc.

ARIA-US‘s change in revenue this period compared to the same period last year of 98.00% is almost the same as its change in earnings, and is about average among the announced results thus far in its peer group, suggesting that ARIA-US is holding onto its market share. Also, for comparison purposes, revenues changed by -0.57% and earnings by 12.21% compared to the immediate last period.

Revenues History
Earnings History

The company’s earnings decline is largely a result of non-operational activity. As a matter of fact, the company showed increases in operating (EBIT) and pretax margins. EBIT margins improved from -321.03% to -193.93% and pretax margins widened from -340.24% to -210.85%.

EBIT Margin History
Cash & ST Investments

ARIA-US‘s change in operating cash flow of -16.22% compared to the same period last year is about the same as its change in earnings this period. Additionally, this change in operating cash flow is about average among its peer group. This suggests that the company did not use accruals or reserves to manage earnings this period, and that, all else being equal, the earnings number is sustainable.

Operating Cash Flow Growth Versus Earnings Growth

Access our Ratings and Scores for ARIAD Pharmaceuticals, Inc.

Company Profile

ARIAD Pharmaceuticals, Inc. operates as an oncology company which engages in the discovery, development, and commercialization of small-molecule drugs for the treatment of cancer. Its products includes Iclusig (ponatinib), Brigatinib (previously known as AP26113), and AP32788. The company was founded by Harvey J. Berger in April 1991 and is headquartered in Cambridge, MA.

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