Updated from 8:36 a.m. EDTShares of aaiPharma ( AAII) fell Tuesday following the company's announcement late Monday that second-quarter earnings rose while revenue fell in comparison to the same period last year. The stock dropped 28 cents, or 8.3%, to $3.11 in morning trading. The higher profit and the lower revenue were both due primarily to the company's sale of its injectable vitamin businesses on April 26. The company recorded a net gain of $37.5 million for the three months ended June 30. The Wilmington, N.C.-based drug company, which announced its financial results Monday after markets had closed, earned $7.2 million, or 25 cents a share, on sales of $51.5 million for the second quarter of 2004. For the same period last year, the company earned $3.5 million, or 12 cents a share, on revenue of $66.1 million. The lower revenue for 2004's second quarter also was caused by lower sales among several products due to high inventories of those goods still being held by distributors. Higher expenses for the second quarter were caused, in part, by a dispute between aaiPharma and another drug company and by an investigation by board members into the reasons for the excessive inventories and the accounting problems linked to the inventories. The company is "still clearing the decks in rough seas," said David W. Maris, of Banc of America Securities, in a research report issued Tuesday just before aaiPharma conducted a telephone conference call for investors and analysts. Excluding the gain on the vitamin businesses' sale, aaiPharma lost 54 cents a share for this year's second quarter, Maris said. The consensus view of two analysts polled by Thomson First Call was a loss of 20 cents a share. The company still has a long way to go to regain the confidence of investors and analysts; and it still must resuscitate its stock price, which hit a 52-week high of $31.85 on Jan. 21 and has dropped steadily since then. According to Thomson First Call, three analysts recommend holding aaiPharma's stock, while three analysts advocate selling it. "Despite being a long way from returning to profitability, the company's principal focus may be liquidity," said Maris, who has a neutral rating on a stock that he calls extremely volatile.