Watson Reports 22% Profit Increase
Drug maker Watson Pharmaceuticals Inc. said Tuesday that its fiscal second-quarter profit rose about 22%, matching estimates, as recent acquisitions and its generic version of anxiety drug BuSpar boosted sales by 49%.
But the Corona-based company’s stock fell 4.47%, or $2.83, to close at $60.50 on the New York Stock Exchange, as the results disappointed some analysts, who had expected Watson to beat the consensus estimate and report revenue well above $300 million.
The company reported earnings of $56 million, or 52 cents per share, excluding a one-time gain. That compares with second-quarter 2000 earnings of $46 million, or 45 cents per share.
Analysts, on average, projected Watson would earn 52 cents per share, with estimates ranging from 49 cents to 53 cents per share, according to research firm Thomson Financial/First Call.
In a conference call with analysts and investors, Watson officials said the company expects third-quarter earnings of 60 cents to 63 cents per share, and full-year earnings of $2.20 to $2.24 per share on revenue of $1.25 billion to $1.275 billion.
The consensus estimates were 62 cents per share for the third quarter and $2.23 per share for the full year, according to First Call.
Watson’s second-quarter revenue rose to $299 million from $200 million a year ago, driven primarily by its BuSpar knockoff and acquisition of Schein Pharmaceutical Inc.
Watson and Mylan Laboratories Inc. in late March were permitted six months as the only generic sellers of their versions of BuSpar, made by Bristol-Myers Squibb Co. The approvals followed a four-month patent battle in court between Mylan and Bristol-Myers.
Watson’s shares have outperformed those of its peers, rising nearly 18% this year. The American Stock Exchange pharmaceutical index has fallen about 10% amid the downturn in financial markets.
(BEGIN TEXT OF INFOBOX / INFOGRAPHIC)
Healthy Gains
The stock of Watson Pharmaceuticals has outperformed its peers, rising nearly 18%
year to date.
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Watson Pharmaceuticals, monthly closes and latest on NYSE
Tuesday: $60.50, down $2.83
Source: Bloomberg News
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