Watson Profit Tops Wall Street Estimate
Watson Pharmaceuticals posted higher-than-expected quarterly profit on Monday, as generic versions of the Lipitor cholesterol fighter and Lovenox blood thinner helped revenue soar by 74%.
First-quarter net income rose to $54.8 million, or 43 cents per share, from $45.3 million, or 36 cents per share, a year earlier.
Excluding special items, earnings of $1.64 topped the average estimate of analysts by 4 cents per share, according to Thomson Reuters I/B/E/S.
Total revenue rose to $1.52 billion in the first quarter from $876.5 million in the 2011 period.
"Overall, a good quarter, in our view, though we note the revenue mix was somewhat unfavorable given strength of lower margin Distribution sales and softer-than-expected Brand sales," Wells Fargo analyst Michael Tong wrote in a research note.
"In general, we think Watson investors are largely looking toward 2013 and that the Actavis deal allays concerns about 2013 growth," Tong added.
Last week, Watson agreed to pay at least $5.6 billion for privately held Actavis to cement its status as one of the world's biggest suppliers of generic drugs and expand further internationally.
Revenue in its generic unit rose to $1.12 billion in the quarter from $600.1 million, driven by new product launches and an increase in international sales.
The company said its global generics business launched more than 60 new products and expanded its global presence with its acquisition of Ascent Pharmahealth.
Watson forecast 2012 earnings per share of $5.55 to $5.80, excluding items, on revenue of $5.5 billion. According to Thomson Reuters I/B/E/S, Wall Street was expecting earnings of $5.80 per share on revenue of $5.5 billion.
