reported that second-quarter earnings fell below Wall Street's estimates and came in lower than in the same period last year.
The Miami-based generic drug company also reaffirmed its full-year earnings predictions, noting that such guidance "must be qualified by any impact" of the recently announced proposal by
Teva Pharmaceutical Industries
to buy Ivax for $7.4 billion.
The deal must be approved by shareholders of both companies and by U.S. and international regulatory agencies. Ivax said Monday that it's preparing a proxy to file with the
Securities and Exchange Commission
in order to obtain shareholder approval. Ivax expects the deal to close in late 2005 or early 2006.
Dr. Phillip Frost, Ivax's chairman and CEO, said that although he believes the company "has a terrific future as a stand-alone company," the Teva acquisition will produce "an even better future of Ivax investors." Frost made his comments during a telephone conference call in which Ivax executives took no questions from analysts or investors.
Ivax earned $45.6 million, or 17 cents a share, on revenue of $577.3 million for the three months ended June 30. Analysts surveyed by Thomson First Call had forecast a profit of $55 million, or 20 cents a share, on revenue of $541.9 million.
For the same period last year, Ivax earned $48.1 million, or 18 cents a share, on revenue of $464 million.
The company attributed the profit skid to a higher tax rate in the 2005 second quarter. In the latest quarter, the tax rate was 30%, vs. 17% in the same period last year.
"We expect our second half of 2005 to be significantly stronger," said Neil Flanzraich, vice chairman and president. He reaffirmed the full-year EPS prediction of 76 cents to 86 cents, adding that he expects the final figure to be in the middle to upper end of that range. The Thomson First Call consensus is 82 cents.
Although the second-quarter profit fell below analysts' expectations, Ivax's shares rose 5 cents to $25.53 at midsession.
Teva is offering $26 a share in cash, stock or a combination of the two to Ivax investors, so it's doubtful there will be significant changes in Ivax's shares in the following months. Of course that could change if Ivax experiences some significantly bad news or there's a dramatic change -- positive or negative -- in Teva's performance.
Unlike Teva, whose North American sales dropped during the second quarter, Ivax reported 14% higher revenue to $261 million for the three months ended June 30. North America is Ivax's biggest market. Sales in Europe rose 15% to $197 million, and sales in Latin America rose 29% to $98.4 million.