Waton Pharmaceuticals Beats

At 46 cents a share, fourth-quarter earnings are a penny above forecasts.
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Watson Pharmaceuticals


on Thursday reported fourth-quarter sales and earnings that beat Wall Street estimates.

For the three months ended Dec. 31, Watson earned $55.1 million, or 46 cents a share, on revenue of $423.5 million. The consensus prediction of analysts polled by Thomson First Call was a profit of $52.1 million, or 43 cents a share, on revenue of $400.5 million.

For the same period in 2003, the company earned $52.9 million, or 45 cents a share, on revenue of $406.2 million.

Watson's quarterly and full-year revenue growth was paced by its generic products which account for about 75% of sales. Fourth-quarter generic sales rose about 9% to $324.5 million. "We begin 2005 fundamentally stronger," said Allen Chao, the company's chairman and CEO.

The company predicted 2005 revenue would be in the range of $1.65 billion to $1.70 billion compared with a consensus estimate of $1.68 billion.

On a GAAP basis, the company predicts 2005 earnings per share to be in the range of $1.33 to $1.43, excluding the impact of a $300 million stock buyback authorized by the board on Thursday and the potential revenue from a generic painkiller that hasn't yet received approval from the Food and Drug Administration. On a non-GAAP basis, the consensus EPS estimate at Thomson First Call is $1.90.

For fiscal 2004, Watson earned $151.3 million, or $1.27 a share, on revenue of $1.64 billion. For fiscal 2003, it earned $202.9 million, or $1.75 a share, on revenue of $1.46 billion.

Watson announced its financial results after markets had closed. In regular trading, the stock lost 37 cents, or 1.3%, to $28.11. In after-hours trading, the stock rose 19 cents.