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Watson Pharmaceuticals to Miss Forecasts

September 13, 2000|Bloomberg News

Watson Pharmaceuticals Inc. said profit this year and next would be below analysts' estimates because of slow sales and high costs at its Schein Pharmaceutical unit, which Watson acquired last month. Corona-based Watson, which makes brand-name and generic drugs, said it will earn 3 cents to 5 cents a share in its third quarter, well below the 48-cent average estimate of analysts surveyed by First Call/Thomson Financial. Fourth-quarter profit will be 39 cents to 41 cents, Watson said. The First Call estimate was 54 cents. The Corona-based company attributed the expected shortfall to higher-than-expected inventories at Schein customers and goodwill and operating expenses at the unit. Watson also said prices declined amid increased competition from generic drugs for its prescription acne treatment Monodox. Watson said 2001 profit would be $2.38 to $2.42 a share. The company had been expected to earn $2.47. The Schein acquisition was valued at $644.2 million when it was announced in May. Watson shares fell $4.50 to close at $64.13 on the New York Stock Exchange. The announcement was made after the close of U.S. trading, though analysts said earlier the company had called an unscheduled meeting. The shares had nearly doubled in 2000 before the announcement.

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