Update: Bausch & Lomb Falls on Slight Drop in Sales

Updated from 1:02 p.m. EDT

Shares of

Bausch & Lomb

(BOL)

fell more than 20% Wednesday after the big maker of contact lens and solutions reported a slight drop in second-quarter sales, although operating earnings rose 38%, meeting Wall Street's expectations.

The company also said that it was negotiating to acquire an unidentified pharmaceutical company overseas and that it could reach a definitive agreement on a deal as early as the end of July. It said the planned acquisition would not add to its earnings until 2002.

Bausch & Lomb closed Wednesday regular trading at 61 3/4, down 17 1/16 or 22%

For the second quarter ended June 24, the Rochester, N.Y.-based company said that net earnings from continuing operations rose to $40 million, or 74 cents a diluted share, from $28.9 million, or 49 cents a share a year earlier. The consensus estimate of analysts polled by

First Call/Thomson Financial

was 49 cents a share.

Revenue from continuing operations fell to $452.9 million from $453.3 million a year ago. They "were negatively affected by short-term market issues in our U.S. lens care and pharmaceutical businesses," said William Carpenter, chairman and chief executive of Bausch & Lomb, in a statement. The vision care business posted a 2% decline and the pharmaceuticals business was down 12%.

The earnings figures for the second quarter exclude $8.4 million in pretax charges, with $3.7 million related to the company's

failed attempt to buy

Wesley Jessen VisionCare

(WJCO)

and $4.7 million related to the settlement of a consumer class action lawsuit.

Including one-time items, net income fell 80%, to $34.6 million, or 64 cents a share, from $173.4 million, or $2.94 a share, a year earlier.