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Tax-related gains and higher sales of a drug used to fight sleepiness propelled



to a fourth-quarter profit, the company reported Wednesday. But the company's guidance for earnings in the current quarter -- 20 cents a share -- was far below analysts' expectations of 31 cents and is apparently a result of spending on sales and marketing that is much higher than forecasted.

The West Chester, Pa., drugmaker posted a profit of $140 million, or $2.46 a share, which includes a one-time gain of $116.7 million. In the same quarter last year, the company posted a loss of $65.5 million, or $1.23 a share, which included one-time acquisition charges.

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Without the tax gain, the company would have earned 41 cents a share, 5 cents better than Wall Street's expectations.

Cephalon said fourth-quarter revenue rose to $144.3 million, compared with $79.6 million a year ago, an increase of 81%. Quarterly sales of the company's flagship product, the antisleepiness drug Provigil, were $54.8 million, compared with $39.7 million in the same quarter last year.

For the year, the company earned $3.01 a share according to generally accepted accounting principles, on revenue of $506.9 million.

"Our success in 2002 reflects the balance we have achieved in our product portfolio," CEO Frank Baldino said in a prepared statement. "We increased product sales by 106% over 2001 and delivered remarkable earnings growth."

Looking forward, Cephalon expects 2003 product sales of $650 million to $660 million, and diluted earnings of about $1.50 a share after taxes. For the first quarter of 2003, management expects sales of $142 million and diluted earnings of 20 cents a share.

In regular trading, shares of Cephalon dropped 3 cents, or 0.06%, to $51.70. After hours, shares were falling $3, or 5.8%.