Updated from 5:26 p.m. EDT

Watson Pharmaceuticals

(WPI)

issued second-quarter results that edged past analysts' estimates as strong generic-drug sales offset weak revenue from brand-name drugs.

For the three months ended June 30, Watson earned 27 cents a share, excluding one-time items, or one penny better than the average estimate from analysts polled by Thomson First Call. Second-quarter revenue of $510.4 million outpaced the consensus prediction of $466.7 million.

Using generally accepted accounting principles, Watson reported a loss of $15.6 million, or 15 cents a share. For the same period last year, Watson earned $40.4 million, or 35 cents a share, on revenue of $416.3 million.

Watson attributed the loss for the recently completed quarter to noncash asset-impairment charges relating to the rights of two products, as well as to charges for the closing and selling of two plants.

Sales of generic drugs rose 34% from last year to $419.4 million, but sales of brand-name products dropped 13% to $88.1 million. Sales were aided by generic versions of Pravachol, the

Bristol-Myers Squibb

(BMY) - Get Report

cholesterol drug that lost U.S. patent protection in April.

Allen Chao, Watson's chairman and CEO, said the Corona, Calif.-based company's full-year revenue prediction remains at a range of $1.8 billion to $1.9 billion. The full-year GAAP estimate for earnings is a range of 89 cents to 97 cents, including the charge for impaired assets. Excluding the charge, the EPS forecast was consistent with the company's previous estimate of $1.25 to $1.33. The Wall Street consensus is $1.21.

The forecast excludes the pending acquisition for generic-drug rival

Andrx

(ADRX)

. Even though

Andrx shareholders approved the $1.9 billion cash offer in late June, the Federal Trade Commission is still reviewing the deal. Watson is paying $25 for each Andrx share. Chao said he believes the deal can be closed in two to three months.

Watson released its financial results after the markets had closed. In regular trading, Watson gained 41 cents, or 1.9%, to $22.40. The stock rose another 40 cents in after-hour trading.