Chiron Still Subdued

The company swings to a profit on soft revenue.
Publish date:

Updated from 4:35 p.m. EDT


(CHIR) - Get Report

swung to a third-quarter profit on slightly better-than-expected sales and reiterated the earnings guidance it gave when it announced it wouldn't ship any flu vaccine this winter.

Emeryville, Calif.-based Chiron earned $24 million, or 13 cents a share, in the three months ended Sept. 30, compared with a loss of $19 million, or 10 cents a share, last year. Revenue was $524 million in the latest quarter, compared with $540.5 million a year ago.

Chiron wrote off its entire inventory of the Fluvirin vaccine this quarter, resulting in a charge of $91 million, or 36 cents per share, to both GAAP and pro forma results. British authorities

shut down Chiron's Liverpool manufacturing plant earlier this month after contamination of flu vaccine made there was discovered. The company was also helped by a gain of 18 cents a share from a legal settlement.

On a pro forma basis, Chiron earned $49 million, or 26 cents a share, from continuing operations in the latest quarter, compared with $117 million, or 60 cents a share, last year. Analysts were forecasting earnings of 6 cents a share on revenue of $451.2 million.

Chiron repeated its full-year guidance for pro forma earnings of 70 cents to 80 cents a share, an estimate that doesn't include any revenue from sales of Fluvirin.

On its conference call, Chiron CEO Howard Pien said the company is working on a remediation plan to fix the problems at its Liverpool plant, but the company would not commit to any timeline, nor would it say whether the plant would be up and running in time to make vaccine for the 2005-2006 flu season. Chiron also refused to take any questions regarding Fluvirin.

Chiron had been expected to supply about half of the flu vaccine doses needed in the U.S. this season.

Ahead of its earning report, Chiron shares fell 73 cents, or 2%, to $31.13 in Wednesday's regular session. The stock rose 32 cents to $31.45 in after-hours trading.