Allergan Earnings Jump Almost 30% on Increased Sales
Allergan Inc., the maker of pharmaceutical and eye- and skin-care products, said its earnings were up nearly 30% in the second quarter on a 7% increase in sales.
Cost-cutting, selling unprofitable businesses and continued international expansion were among the reasons the company gave for its strong showing.
Quarterly earnings were $23.1 million, equal to 34 cents per share, compared to $17.8 million, or 26 cents per share, in the year-ago quarter. Revenue was $220.7 million, up from $205.9 million in second quarter 1991.
The experts had expected earnings of 32 or 33 cents per share, so Allergan outperformed that prediction, said John Girton, an analyst with San Francisco-based stock brokerage Van Kasper & Co.
Girton said the second-quarter report showed “really nice expense control” without cutting spending on research and development. One new product investors have been awaiting--a single-bottle chemical disinfection system for soft contact lenses--is scheduled for launch in non-regulated countries during the fourth quarter, Allergan announced.
The company’s stock fell 25 cents Wednesday to $22.13 in New York Stock Exchange trading. The earnings report was released after the market closed.
Allergan attributed its strong performance to some long-term efforts: a continuing corporate restructuring, consolidation of manufacturing sites, an emphasis on new product development and lower spending on selling, general and administrative accounts. The company eliminated 70 jobs in Orange County in October with the stated intent of improving operating efficiency.
The company also continues to expand its international sales, which it said accounted for 53% of revenue during the first six months of 1992 compared to 51% last year.
Allergan has been selling off unprofitable subsidiaries and product lines. In April, the company sold its contact lens business in North and South America, which represented nearly a third of that $77.6-million-a-year product line. Six months earlier, it sold Allergan Humphrey, the company’s diagnostic instrument subsidiary.
Consequently, Allergan’s sales of contact lenses and lens care lines were up 3% over last year, to $96.9 million. However, the company said it is still seeking a partner for its contact lens business outside of the Americas.
For the first six months of 1992, net income increased almost 25% to $43.2 million, compared to $34.6 million earned during the first half of 1991. Revenue was $430.8 million, up 7% over the $402.1 million figure for the first half of last year.
