Omnicare Q3 Profit Rises, Despite Revenue Decline; Revises FY09 EPS View

11/5/2009 11:45 AM ET

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(RTTNews) - Thursday, geriatric pharmaceutical services company Omnicare Inc. (OCR: News ) reported an increase in third quarter earnings that beat Street estimate, benefiting from lower expenses, provisions and charges. Quarterly revenues were down from the prior year. Going forward, the company revised its fiscal 2009 earnings outlook.

The Covington, Kentucky-based company's third-quarter net income rose to $72.51 million or $0.61 per share, up from $53.76 million or $0.46 per share last year.

Excluding items, adjusted net income increased to $83.27 million or $0.71 per share from $71.39 million or $0.61 per share prior year. On average, ten analysts polled by Thomson Reuters expected the company to report profit of $0.60 per share for the quarter. Analysts' estimates typically exclude special items.

Net income for the quarter included the impact of special items and accounting changes totaling $10.8 million or $0.09 per share after-tax, compared to $17.6 million or $0.15 per share after-tax a year ago.

Quarterly sales dipped to $1.544 billion from $1.578 billion last year. Revenues fell short of analysts estimate of $1.55 billion.

Segment wise, Omnicare's pharmacy services business generated sales of $1.507 billion for the quarter, down from $1.527 billion a year ago. Adjusted operating profit for the segment was $164.4 million, compared to $174.2 million a year ago.

Omnicare's CRO business recorded revenues of $36.9 million, down from $51.5 million in the same prior-year quarter. Adjusted operating profit for the segment was $0.7 million, compared to $4.5 million a year ago.

For the quarter, the company's selling, general and administrative expenses declined to $203.39 million from $228.33 million a year ago, while provision for doubtful debts decreased to $23.09 million from $27.18 million last year. Restructuring charges for the quarter was $6.3 million, down from $7.66 million a year ago.

Year-to-date, Omnicare's net income increased to $132.13 million or $1.12 per share, up from $112.84 million or $0.95 per share in the corresponding period last year. Revenues dipped to $4.627 billion from $4.631 billion in the previous year.

Looking ahead, Omnicare reduced the upper range of its full-year 2009 adjusted earnings guidance to $2.50 - $2.52 per share from continuing operations. Earlier, the company projected earnings per share in the range of $2.50 - $2.55.

Additionally, the company said in light of strong cash flow for the year-to-date, it has increased its full-year 2009 cash flow guidance to $500 million - $550 million, excluding one-time litigation payments.