Chattem Tops Forecasts

Shares hit a 52-week high.
Author:
Publish date:

Shares of

Chattem

(CHTT)

got another boost Tuesday after the consumer products company's third-quarter profit topped Wall Street's forecast.

The company's earnings for the quarter ended Aug. 31 rose to $15.2 million, or 81 cents a share, from $9.4 million, or 46 cents a share, a year earlier.

The results for both years included various items related to ongoing litigation over Chattem's Dexatrim weight-loss product. Excluding items in both periods, Chattem's earnings dropped to $8.9 million, or 47 cents a share, from $11.3 million, or 55 cents a share, a year earlier.

The earnings on this basis beat analysts' mean estimate of 42 cents a share, as compiled by Thomson First Call.

Chattem's revenue rose to $72 million from $68.2 million a year earlier, in line with Wall Street's target. The company said the revenue growth was driven the strength of its Gold Bond and Dexatrim brands.

The company's bottom-line results, however, were hurt by lower margins. Chattem attributed the decline to the launch of Icy Hot Pro-Therapy, which has lower gross margins than other products.

For the full year, the company expects earnings of $1.90 to $2.20 a share, before items, on revenue of $295 million to $310 million. Analysts, on average, forecast earnings of $1.88 a share and revenue of $303 million.

Chattem also backed its forecast for fiscal 2007, predicting earnings of $2.50 a share or greater. Wall Street expects earnings of $2.30 a share.

Shares of Chattem recently were trading at $45.71, up $2.89, or 6.8%. Earlier in the session, the shares hit a 52-week high of $46.06.

The stock's previous 52-week high of $44.84 was hit Friday, when Chattem's shares jumped 28% on news that the company agreed to buy five over-the-counter brands from

Pfizer

(PFE) - Get Report

and

Johnson & Johnson

(JNJ) - Get Report

.