Forest Labs Posts Profit In Q3 Above View; Raises FY14 Earnings Forecast

(RTTNews) - Drug maker Forest Laboratories, Inc. (FRX) reported Tuesday a profit in its third quarter, compared to a loss last year. Adjusted earnings topped analysts' estimates. The company also lifted its fiscal 2014 forecast for adjusted earnings, above analysts' estimates.

In pre-market activity, Forest shares gained $3.26 or 4.74 percent and traded at $72.

Chief Executive Officer and President Brent Saunders said, "In my first 100 days at Forest we have accomplished a great deal, challenging the conventional wisdom. We took very important strategic actions that have jump-started the rejuvenation of Forest, including acquiring Saphris for $240 million, commencing Project Rejuvenate to reduce our cost base by $500 million, raising $1.2 billion through a bond offering, and announcing plans to acquire Aptalis for $2.9 billion."

For the third quarter, net income was $17.96 million or $0.07 per share, compared to a loss of $153.61 million or $0.58 per share a year ago. The latest quarter results included $28.2 million charge related to Project Rejuvenate.

It was in December 2013 that the company announced Project Rejuvenate, a cost savings initiative with a goal of streamlining operations and reducing $500 million in operating expenses by fiscal 2016.

Adjusted earnings, which excluded items, were $73.97 million or $0.27 per share, compared to loss of $57.14 million or $0.21 per share last year. On average, 19 analysts polled by Thomson Reuters expected earnings of $0.04 per share. Analysts' estimates typically exclude special items.

Total revenue for the quarter climbed to $878.40 million from last year's $716.28 million, while analysts expected revenues of $827.25 million.

Net sales for the quarter increased 24.9 percent year-over-year to $846.8 million reflecting a 59.4 percent climb in sales of next generation products to $375.4 million.

In the Central Nervous System Franchise, sales of Namenda (memantine HCl), an NMDA receptor antagonist for the treatment of moderate to severe Alzheimer's disease, increased 5.2 percent and Viibryd (vilazodone HCl) climbed 29.7 percent.

In the Respiratory Franchise, sales of Daliresp (roflumilast) grew 53.4 percent.

Bystolic (nebivolol), a beta-blocker for the treatment of hypertension, recorded 20.1 percent rise in sales.

Looking ahead for the fiscal year ending March 31, Forest Labs now expects adjusted earnings per share to be in the range of $1.25 to $1.35, higher than previous forecast of $0.95 to $1.15 per share. Analysts project annual earnings of $1.10 per share for the year.