WASHINGTON (dpa-AFX) - Watson Pharmaceuticals, Inc. (WPI) on Monday reported a significant increase in first-quarter profit, as new generic drug launches and improved overseas performance helped grow revenues substantially. Both earnings per share and the top line beat Wall Street estimates. Citing strong quarterly performance, the generic drug maker boosted its 2012 forecast.
President and CEO Paul Bisaro noted that substantial double-digit revenue growth across its three businesses - Global Generics, Global Brands and Distribution - drove the significant earnings growth.
Global Generics segment net revenue surged 86 percent to $1.1 billion as a result of new product launches and a 58 percent increase in international net revenue. New products included the generic versions of attention deficit disorder drug Concerta, cholesterol drug Lipitor and anticoagulant therapy Lovenox.
'In our Global Generics business, we launched more than 60 new products and filed 28 applications globally,' Bisaro said.
In the first quarter, net income attributable to common shareholders grew to $54.8 million or $0.43 per share from $45.3 million or $0.36 per share a year earlier.
Adjusted net income, which excluded certain items, climbed 87 percent to $208.8 million and adjusted earnings per share grew 84 percent to $1.64. The consensus estimate of 22 analysts polled by Thomson Reuters was $1.60 per share. Analysts' estimates typically exclude one-time items.
The company's net revenues climbed 74 percent to $1.52 billion, beating analysts' estimate of $1.48 billion.
Meanwhile, adjusted gross margin of global generics decreased to 45.1 percent from 51.8 percent last year due to sales of the authorized generic versions of Lipitor and Concerta at lower margins.
Looking ahead, for fiscal 2012, Watson now estimates adjusted earnings to be between $5.55 and $5.80 per share versus its prior range of $5.50 to $5.80 per share, while 25 analysts project earnings of $5.80 per share for the full year. Net income on a reported basis is expected to be between $2.30 and $2.57 per share.
Total net revenue for 2012 is currently anticipated to be about $5.5 billion compared with its earlier projection of about $5.4 billion. Analysts expect revenue of $5.50 billion for the same year.
Watson said its annual forecast excludes any effect from the pending acquisition of Actavis Group which is expected to close in the fourth quarter of 2012. It was last Wednesday that Watson agreed to acquire privately-held Swiss rival Actavis Group for an upfront payment of 4.25 billion euros or $5.6 billion.
'Watson maintained its record of solid performance in 2012, performance that enables us to execute on our business strategies including increasing our Global Generics business presence with the acquisition of Actavis Group. We will continue to look for strategic opportunities to propel Global Brands and biologics growth and will remain focused on the expansion of our Anda business into specialty distribution,' Bisaro added.
In pre-market activity, Watson shares increased $2.34 or 3.07 percent and currently trading at $78.50.
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