did they really miss ?
biz.yahoo.com
The market expected Elan to post revenue of about $165 million and an adjusted loss of 17 cents a share, or around 27 cents a share on a fully diluted, according to the mean estimate of three analysts.
The company is in the last phase of an asset-disposal program to boost its flagging balance sheet and pay off debt.
Divestments totaled around $1.8 billion, Elan said. This excludes $103 million from the recent sale of four pain-relief products. That deal is expected to close in the fourth quarter.
Of a total of 55 active joint ventures in July 2002, 41 have been terminated or restructured to date, the company said.
Operating costs, meanwhile, were "encouragingly lower than expected," said Davy Stockbrokers analyst Jack Gorman. This indicates further progress in the cost recovery program, he added.
Analysts also were generally positive about Elan's plan, announced Wednesday, to repurchase the Pharma Marketing royalty obligation for $100 million. The purchase shows Elan's confidence in its current cash flow situation, they said.
"The early repurchase of the royalty rights should help boost Elan's operating margins in future periods," said Peter Frawley, an analyst with Merrion Stockbrokers.
Following the results, Mr. Frawley has reduced his sum of the parts valuation to $6.35 from $6.50 a share, reflecting lower-than-expected cash balances and investment values.
"However, if [multiple sclerosis and Crohn's disease drug] Antegren and [pain reliever] Prialt eventually gain approval and reach their peak revenue potential, our valuation increases to close to $10 a share, suggesting significant upside from current levels," he added.
Elan now has financial flexibility through 2005, Elan President and Chief Executive Kelly Martin said Wednesday.
Earlier this month, Elan removed uncertainty over its cash situation by shoring up its balance sheet through a mixture of debt and equity offerings that raised around $595 million.
-Quentin Fottrell, Dow Jones Newswires; 353-1-6762189 |
