TARO is in the generic drug business. They took a steep drop on missed earnings in November.
Taro Pharma 3Q Profit Drops on Higher Costs
Thursday November 17, 9:27 am ET
Taro Pharmaceutical Third-Quarter Profit Slumps 48 Percent on Price Erosion, Higher Costs
HAWTHORNE, N.Y. (AP) -- Taro Pharmaceutical Industries Ltd. said Thursday that its third-quarter profit fell 48 percent, hurt by price erosion, higher production costs and product mix, causing the generic drug maker to fall well short of Wall Street estimates.
Taro shares fell $3.50, or 16 percent, to $18.40 in premarket activity.
Net income declined to $2.1 million, or 7 cents per share, from $4 million, or 14 cents per share, a year ago. Revenue fell 1 percent to $72.5 million from $73.3 million last year.
Analysts surveyed by Thomson Financial expected earnings per share of 28 cents on revenue of $80.7 million.
The company also said it revised the accounting treatment for revenue received in the sale of certain inventories under a three-year contract. The change will reduce revenue and net income in the first quarter of 2005 by $4.8 million and $1.2 million respectively.
Taro said it will allocate the amount of the reduction in revenue and net income over the three-year contract period.
In the second quarter, revenue was increased by $400,000 and net income by $100,000. The results of the third quarter and the nine months reflect these changes, the company said. |
