Health Winners & Losers: Obagi
Staff cuts and earnings peppered the news on an overall tepid Tuesday for health stocks.
Merck
(MRK) - Get Report
said Monday after the market close that it will slash its salesforce by 1,200 positions, or roughly 15%, as part of a previously announced strategy to transition to a new commercial model in the U.S. where the company is dealing with declining sales. Merck said the layoffs will be completed by the end of July.
The pharmaceutical company's shares were down 0.4% at $38.81.
In related news,
Reuters
reported Tuesday that medical-device maker
Medtronic
(MDT) - Get Report
will cut roughly 1,100 jobs in areas where growth has slowed. The stock was roughly flat at $49.04.
In earnings,
Human Genome Sciences
(HGSI)
fell 8% to $6.10 Tuesday after releasing its quarterly results after Monday's market close. The company narrowed its loss to $46.9 million, or 35 cents a share, from 38 cents a share in the 2007 quarter, and reported a 33% rise in revenue to $12.3 million. However, Wall Street analysts expected a narrower loss of 19 cents a share on revenue of $14.9 million.
Meanwhile,
Obagi Medical Products
(OMPI)
took a beating after scaling back full-year guidance with its quarter results. The company now expects sales in the range of $113 and $117 million, vs. prior estimates of between $120 and $125 million. It now predicts profit of between 81 cents a share and 85 cents a share, down from 94 cents a share to 98 cents a share.
For the first quarter, the company reported profit of $3 million, or 13 cents a share, on net sales of $25.4 million. Analysts were looking for 18 cents a share on revenue of $27.1 million. Obagi shares were down 20% at $6.97.
The Israel-based
Teva Pharmaceutical
(TEVA) - Get Report
said due to a $382 million charge for its CoGenesys acquisition, net income fell to $147 million, or 18 cents a share, from 42 cents a share a year prior. On an adjusted basis, factoring out the charge, the company said it earned $529 million, or 64 cents a share, on revenue of $2.57 billion. Results were slightly higher than expectations of analysts, who were looking for earnings of 63 cents a share on revenue of $2.53 billion. But Teva's share slid 1.5% at $46.63.
Teva -- in addition to aforementioned Merck -- is a component of the Amex Pharmaceutical index, which was down 0.3% at 304.35.
Faring better,
McKesson
(MCK) - Get Report
said Monday post close that its fourth-quarter profit also beat Wall Street estimates, rising to $307 million, or $1.05 a share, up from $257 million, or 85 cents a share, in the year-ago period. Revenue increased 9% to $26.23 billion, close to its part of the Thomson Financial consensus target of $1 a share on revenue of $26.83 billion.
The company, which serves the healthcare industry, said it expects to earn between $3.75 and $3.90 a share for the year, while analysts had estimated $3.78 a share, on average. Shares were up 7.8% at $58.29 Tuesday.