Updated from 5:55 p.m. EST

Mylan Laboratories

(MYL) - Get Report

delivered a third-quarter financial report that just beat Wall Street's estimates, and the generic-drug maker issued fiscal-year predictions that were in line with analysts' consensus forecast.

The company said Thursday that it earned 25 cents a share, excluding items, for the three months ended Dec. 31. On average, analysts surveyed by Thomson First Call were looking for earnings of 24 cents a share.

On a GAAP basis, Mylan earned $48.2 million, or 22 cents a share, on revenue of $311.2 million. For the same period in 2004, Mylan earned $34.8 million, or 13 cents a share, with revenue of $291 million.

For the fiscal year ending March 31, Mylan predicted earnings in the range of 94 cents to $1 a share vs. the average analyst target of 97 cents. The company's previous range had been 92 cents to $1.15. Mylan said earnings for fiscal 2007 should rise to $1.20 to $1.40 a share, with revenue of $1.25 billion to $1.36 billion. Analysts expect EPS of $1.23 and revenue of $1.37 billion.

During the third quarter, research and development expenses rose 26% to $29.3 million, primarily because of continuing research on the experimental blood pressure drug nebivolol, whose marketing rights

were licensed in January to

Forest Laboratories

(FRX)

. Mylan will get an upfront payment of $75 million as well as royalties based on sales.

Administrative and marketing expenses dropped by 24% to $48 million as a result of the company closing its brand-name drug unit last year. Although Mylan had hoped to develop a diverse portfolio of brand-name and generic drugs, it decided to focus on its core generics business.

Mylan hasn't given up on higher-margin products. In addition to licensing nebivolol, it also is a joint-venture partner with generic-drug maker

Watson Pharmaceuticals

(WPI)

in Somerset Pharmaceuticals, which is working on a skin-patch delivery system for selegiline, a drug now sold in capsules as Eldepryl for Parkinson's Disease.

Somerset is testing the skin-patch version for Parkinson's Disease, depression and Azheimer's Disease. The FDA is expected to decide later this month on Somerset's application for the drug, under the brand name Emsam, as a treatment for major depressive disorder. An FDA advisory committee supported the drug in October.

Bristol-Myers Squibb

(BMY) - Get Report

is the marketing partner for Emsam.

Mylan's results were issued after the markets had closed. In regular trading Thursday, the stock lost 57 cents, or 2.9%, to $19.30. After hours, the stock rose 45 cents.