That prompted me to look at some of the local companies with more than $500 million in quarterly revenue that have reported financial results over the last 10 days.
I was not surprised to see Valley Forge-based UGI Corp. report a small net loss ($6.3 million, or 6 cents per share) for its third quarter ended June 30, comparable to the $7.2 million, or 6 cents per share, for the same period in 2011. UGI is an energy company and the warmer-than-normal weather since the spring was a major factor.
While chemical maker FMC Corp. reported flat net income on higher sales for its second quarter, the Center City company did nudge its earnings per share guidance for 2012 slightly higher based on strength shown by its agricultural products business so far.
But Endo Health Solutions Inc., of Chadds Ford, was a conundrum. On Tuesday, the maker of branded and generic drugs reported an 83 percent decrease in quarterly profits even as revenues rose by 29 percent for its second quarter.
Even more worrisome was that the company cut its financial guidance for 2012. Earnings per share are now anticipated at $1.07 to $1.27 per share rather than the $2.60 to $2.80 per share foreseen in February.
So why did shares of Endo (which changed its name from Endo Pharmaceuticals Holdings Inc. as of May 23) close at $30.67, up 89 cents, or 3 percent, Tuesday?
Well, one reason is that when viewed on an adjusted basis - taking into account the settlement of litigation with generic maker Watson Pharmaceuticals Inc. over Endo's top-selling, branded Lidoderm pain patch - those results beat analyst expectations.
But Endo also offered a carrot to equity investors by announcing a stock buyback of up to $450 million through March 2015.
Companies offer all sorts of reasons for why they spend their cash buying back their own stock. Often, it's because management views the company's shares as being undervalued by the market. Over the last 52 weeks, Endo shares are down 9.5 percent compared with the 34-member Standard & Poor's Midcap Health Care Index, which is up 22.6 percent.
Endo didn't give a specific reason for the share repurchase, saying only that it replaces a $750 million program that had been announced in 2008. Under that plan, Endo had bought $575 million as of June 30.
As with most buybacks, Endo did not say how many shares it planned to buy, or how or when the company would make its purchases. The dollar amount involved is equivalent to about 13 percent of Endo's market value of $3.59 billion based on Tuesday's closing stock price.
Contact Mike Armstrong
at 215-854-2980 or email@example.com, or @PhillyInc on Twitter. Read his blog, "PhillyInc," at www.phillyinc.biz.