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Watson 3Q profit falls 11 percent on taxes, costs

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The Associated Press 9:56 AM Wednesday, November 4, 2009

MORRISTOWN, N.J. — Drug developer Watson Pharmaceuticals Inc. said Wednesday its profit fell 11 percent in the third quarter as higher taxes and charges offset a revenue boost.

Watson said profit declined to $63 million, or 55 cents per share, from $71.1 million, or 62 cents per share, a year ago. Watson said it earned 66 cents per share, excluding impairment charges and other one-time costs.

Revenue rose 3 percent to $662.1 million from $640.7 million.

Analysts polled by Thomson Reuters expected profit of 65 cents per share on revenue of $688.5 million.

Revenue from Watson's generic drug business grew 9.4 percent to $398 million, while revenue from branded drugs rose 6 percent to $112.7 million. Distribution revenue fell 11 percent to $151.4 million.

Meanwhile, the company's income tax provision rose 71 percent to $39.3 million.

Looking ahead, the company expects adjusted profit between $2.50 and $2.58 per share for the full year, on revenue of about $2.7 billion. Analysts expect profit of $2.55 per share on revenue of $2.76 billion.

Shares of Watson fell 23 cents to $35.11 in morning trading.

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November 04, 2009 02:50 PM EST

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