Allergan Posts 42% Earnings Rise to $81.4 Million : Profits: The Irvine manufacturer of eye- and skin-care products reports strong international sales of its optical line.
Buoyed by a strong fourth quarter and growing international sales, Allergan Inc. said Tuesday that its earnings jumped 42% to $81.4 million last year, up from $57.3 million in 1989.
The earnings gain marks a turnaround for the manufacturer of eye- and skin-care products, whose profits for the first three quarters of 1990 had declined compared to the same quarters for the previous year.
Allergan said international sales of its optical products were strong during the fourth quarter, helping to soften the effect of a sluggish U.S. market.
“We are continuing to build our strong worldwide position in eye care, and we are committed to building our skin-care business into a leadership position,” said Gavin S. Herbert, Allergan’s chairman and chief executive.
Some analysts said the company’s earning were better than expected.
“You’ve got to give them credit because they’ve optimized their international sales,” said Jeffrey Kilpatrick, president of Newport Securities Corp. in Costa Mesa.
Allergan’s revenue in 1990 was up 9.5% to $883.9 million, rising from $806.9 million. International sales made up 45% of overall revenue, up from 42% in 1989.
For the fourth quarter, the Irvine firm reported earnings of $25.3 million, contrasted with a year-earlier loss of $10.2 million. The company reported a one-time charge against earnings of $22.8 million in the 1989 quarter for restructuring expenses.
Fourth-quarter revenue rose 16% to $245.4 million, from $211.5 million in 1989.
Allergan stock closed Tuesday at $20.25 per share, down 25 cents in New York Stock Exchange trading. The earnings announcement was made after the market’s close.
Allergan, which SmithKline Beckman spun off as a separate company in July, 1989, said its directors have approved a corporate realignment intended to strengthen the company during the next decade.
The company said the program includes a reduction of selling, general and administrative expenses to “free up resources to increase our investment in (research and development) and to fund future growth in skin care and other specialty health-care areas.”
Allergan said it has reorganized its eye-care business. That segment will now be divided into two groups: pharmaceutical and surgical products, and over-the-counter optical products such as contact lenses and lens-care products.
The company said it will consolidate the marketing and sales operations of four divisions--Allergan Optical, Allergan Pharmaceutical, Allergan Medical Optics and Allergan International--which used to have separate staffs. A fifth unit, Allergan Humphrey, a diagnostic-instrument business in San Leandro, will continue to have its own sales and marketing staff.
Allergan said it has eliminated its Allergan International unit and will now market its different products by geographic region rather than by the type of product. The four regions are: North and South America; Eastern and Western Europe; Japan, and Africa and other parts of Asia.
“What we’ve done is divide up the world and we’ll market all of our products in four geographic regions,” said Jamie Trevor, an Allergan spokeswoman. “The focus is now on the customers and not on the product lines.”
ALLERGAN’S PERFORMANCE
In the fourth quarter ended Dec. 31, Allergan reported earnings of $25.3 million as revenues increased to $245.4 million. The company attributed the gain to improved international sales.
Figures are in thousands, except per share data.
4th Qtr 4th Qtr 12 Months 12 Months 1990 1989 1990 1989 Revenue $245,400 $211,500 $883,900 $806,900 Net income (loss) 25,300 (10,200) 81,400 57,300 Per share (loss) $.38 ($.15 $1.21 $.86
Source: Allergan Inc.
