Watson Pharmaceuticals Shares Drop 20%

Shares of Watson Pharmaceuticals Inc. plunged 20% following the generic drug maker’s late Tuesday announcement that it expects lower earnings for the quarter because of low sales stemming from its recent buy of Schein Pharmaceutical Inc. Watson said it expects third-quarter earnings of 12 cents to 14 cents per diluted share, and general accepted accounting principles (GAAP) earnings per diluted share of 3 cents to 5 cents. First Call Corp.’s GAAP earnings estimate was 48 cents per diluted share. Shares of Corona-based Watson lost $13.13 to close at $51 on the New York Stock Exchange. The company faced aggressive generic pricing competition in its branded dermatology line, the company’s statement said. Banc of America Securities and Buckingham Research Group cut its 2001 earnings per share estimate 6 cents to $2.40, citing Watson’s higher-than-expected inventories that could last through the next two quarters.