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Watson Pharmaceuticals Misses

Revenue and profits are short of estimates.

Wall Street was disappointed with

Watson Pharmaceuticals


Tuesday after the drugmaker fell short of analysts' estimates for both sales and earnings in the third quarter.

Watson, Corona, Calif., earned $34.4 million, or 31 cents a share, on revenue of $440.5 million for the three months ended Sept. 30. Analysts polled by Thomson First Call had predicted earnings of 34 cents and sales of $478.5 million.

For the year-ago quarter, Watson earned $39.1 million, or 35 cents a share, on revenue of $410.3 million.

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The results exclude contributions from the generic-drug company


, whose $1.9 billion purchase was completed on Monday. Citing the timing of the Andrx deal and "numerous adjustments anticipated following the close of the transaction," Watson won't make a full-year forecast for the combined companies.

"The addition of Andrx is one of several key strategic initiatives we have undertaken to enhance long-term revenue growth, reduce costs and achieve operating efficiencies," said Allen Chao, the chairman and CEO of Watson.

Excluding sales from new-product launches and the Andrx impact, Watson expects fourth-quarter operating results will be "similar" to those of the third quarter. The consensus is for a profit of 40 cents on sales of $470.2 million.

Most of Watson's revenue comes from generic drugs. During the third quarter, generic sales accounted for $347.6 million of the total, up 10% from the year-ago quarter. Sales of brand-name products fell 7% to $85.6 million.

Watson's results were announced after markets had closed. In regular trading, Watson lost 9 cents to close at $26.25. Following the report, the stock lost 62 cents.