Omnicare 3Q Net Up 35% On Tax Gain; '09 View Tightened
DOW JONES NEWSWIRES
Omnicare Inc.'s (OCR) third-quarter profit rose 35% on a tax benefit as cost-
cutting helped the geriatric-pharmaceutical company in light of weaker-than-
expected revenue.
The company, which has faced spending cutbacks by consumers and hospitals,
again lowered the top end of its full-year earnings estimate. When Omnicare
tightened its full-year earnings target in July, Chief Executive Joel F.
Gemunder said the company was feeling the effects of additional reimbursement
reductions on certain drugs as well as a lingering "challenging environment" in
the contract-research business. He reiterated that view on Thursday.
The outlook for all aspects of elder care is strong as the average age of the
U.S. population ages because of the baby boom generation. Omnicare dispenses
drugs to nursing homes, assisted-living centers and other long-term care
facilities in the U.S. and parts of Canada.
Profit for the latest quarter rose to $72.5 million, or 61 cents a share, from
$53.8 million, or 46 cents a share, a year earlier. Excluding impacts from
accounting changes and a tax benefit in the latest quarter, earnings dipped to
60 cents from 61 cents.
Net sales fell 2.2% to $1.54 billion.
Analysts surveyed by Thomson Reuters were expecting earnings, excluding items,
of 60 cents on revenue of $1.55 billion.
Gross margin fell to 23.7% from 25.6% despite the cost cuts.
Operating profit in the pharmacy-services fell 5.6% as revenue dropped 1.3%.
Tuesday, the U.S. Justice Department said Omnicare would pay $98 million to
settle charges it engaged in kickback schemes with drug makers and nursing
homes. Omnicare disputed the allegations and said the settlement doesn't include
any finding of wrongdoing or any admission of liability.
Omnicare shares closed at $22.30 and didn't trade premarket. The stock is down
20% this year.
-By Mike Barris, Dow Jones Newswires; 212-416-2330; mike.barris@dowjones.com
(END) Dow Jones Newswires
11-05-090855ET
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