Diagnostic’s Shares Decline 7%

Shares of Diagnostic Products Corp., a maker of lab instruments and other medical equipment, dropped 7% on Friday after lower-than-expected fourth-quarter earnings.

The Los Angeles-based company reported quarterly earnings of $11.1 million, or 37 cents a share, well below the 63 cents forecast by Wall Street analysts. The company earned $15.5 million, or 52 cents, a year earlier.

Sales rose 12% to $117.7 million from $104.8 million.

The company reported its results late Thursday. On Friday, Diagnostic Products’ shares fell $3.70 to $49.50 on the New York Stock Exchange.

Diagnostic Products also reported a one-time charge of $2.4 million in the fourth quarter to reflect part of a possible settlement with the Department of Justice and the Securities and Exchange Commission regarding possible illegal payments to customers by its Chinese subsidiary.

“We’ve pretty much reached agreement on the monetary settlement, but [the commission] still has to put their blessing on it,” said Chief Financial Officer Jim Brill.

All told, Diagnostic Products has set aside $4.8 million for the settlement, Brill said.

The company also has asked the Food and Drug Administration to lift it from a restricted list so that the agency will review its new products, he said.

In March 2004, the FDA suspended a review of the company’s test kit for Chagas, a parasitic disease, citing problems with its application. After the announcement, the company’s stock fell 6% in one day.

Then in July, a federal grand jury subpoenaed documents related to the sale of some stock by company executives and directors.