Updated with recent stock price.
NEW YORK (
posted a lower-than-expected quarterly profit on disappointing drug sales and higher costs.
Despite the weak quarter, Forest maintained its previous guidance for the current fiscal year that ends in March 2012.
Forest shares dropped $1.20, or 3.7%, to $30.92, in Tuesday trading.
Net income fell to $249.8 million, or 91 cents per share in the second quarter ended Sept. 30 from $296.1 million, or $1 per share, one year ago.
Analysts were expecting earnings of 99 cents a share, according to Thomson Reuters.
Total revenue rose 9% to $1.13 billion short of the Street's expectations of $1.15 billion.
Forest launched two new drugs in the fiscal second quarter, part of the company's ongoing effort to replace revenue it will lose next year when its top-selling antidepressant Lexapro loses patent protection.
Dalisrep, a treatment for chronic obstructive pulmonary disease, brought in $1.2 million since an August launch. Viibryd, a newly launched antidepressant, generated $5.3 million in revenue.
"We are pleased with our new product launches for Daliresp and Viibryd and with the continued positive progress of our late stage new product development pipeline," said Forest CEO Howard Solomon, in a statement.
Sales of Lexapro were $596.1 million in the quarter compared with $569.3 million in the year-ago period. The Alzheimer's drug Namenda recorded sales of $336.8 million during the quarter, an increase of 9% from last year’s second quarter.
Forest's gross margin fell to 23.4% in the quarter compared to 23.7% one year ago. Operating expenses, including marketing costs and research and development expenses, were also higher than they were one year ago.
Forest said it still expects earnings for the current fiscal year in the range of $3.60 to $3.70 per share.
The company said nothing Tuesday about earnings for the 2013 fiscal year -- when the full effect of Lexapro's loss of patent protection is to be felt -- but the company previously guided to a floor of $1.20 per share.
--Written by Adam Feuerstein in Boston.
>To contact the writer of this article, click here:
>To follow the writer on Twitter, go to
>To submit a news tip, send an email to:
and become a fan on
Adam Feuerstein writes regularly for TheStreet. In keeping with company editorial policy, he doesn't own or short individual stocks, although he owns stock in TheStreet. He also doesn't invest in hedge funds or other private investment partnerships. Feuerstein appreciates your feedback;
to send him an email.