March 9, 2010 (Chinavestor) Volatile Chinese pharmaceutical company, WuXi Pharmatech Inc. (NYSE:WX) reported 2009 fourth quarter earnings today. When it comes to quarterly earnings it's always easy to pain the picture bright. Most of the time company executives find the appropriate time frame where revenues and/or earnings comparison proves that the company is on a growth path. In this particular case WuXi Pharma (NYSE:WX) reported quarterly net revenue growth of 15% year-over-year, but failed to mention that most of that growth is due to a very low base to start with.
Not to mention earnings or net income where the company is not showing any growth at all. Actually net income fell from last quarter...
WuXi Pharmatech (NYSE:WX) issued a bullish forward looking statement along earnings release saying that revenues are expected to grow at an annual rate of 15%-18% vs. 7% in the past. This is reflected in the chart, blue column at the end. Assuming the company got this right, earnings growth should follow. But based on this information alone I don't think WX is a sound buy. Considering that shares of WuXi Pharmatech (NYSE:WX) are trading -.70% lower at 10:38 A.M., the Street isn't buying the success story either.
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