American Oriental Q3 Profit Down

11/16/2009 5:35 PM ET

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American Oriental Bioengineering Q3 Profit Declines - Quick Facts

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(RTTNews) - Monday after the bell, pharmaceutical company American Oriental Bioengineering, Inc. (AOB: News ) posted a decline in third-quarter profit, compared to the year-ago, due to higher costs and expenses; partially offset by an increase in revenue.

Shenzhen, China-based American Oriental's profit fell to $10.02 million or $0.13 per share from $16.28 million or $0.21 per share in the year-ago period.

Excluding $0.9 million of interest expense on convertible securities and $0.2 million of amortized financing costs, the company's net income attributable to controlling interest was $11.2 million or $0.13 per share.

Analysts polled by Thomson Reuters expected earnings of $0.17 per share for the quarter. Analysts' estimates typically exclude one-time items.

Third-quarter revenue increased 11.7% to $78.81 million from $70.59 million in the prior-year period, reflecting continued demand for the company's pharmaceutical and nutraceutical products. Analysts expected revenue of $88.56 million for the quarter.

Segment-wise, revenue from pharmaceutical products increased 6.3% to $66.0 million from $62.1 million, with revenue from prescription pharmaceutical products increased 22.7% to $29.8 million from the year-earlier quarter.The year over year increase in sales is primarily from prescription formulated Jinji capsule, Boke and CCXA products; offset by declines in sales of Shuanghuanglian Injection Powder or SHL.

OTC pharmaceutical products generated $36.2 million in revenue, down from $37.8 million in the prior year's period due to lower sales performance of Jinji Yimucao as distributors reduced orders in anticipation of pricing uncertainty related to healthcare reform.

Nutraceutical products generated $9.2 million in revenue, up 8.7% from $8.5 million in the year-ago period, reflecting increased sales of new beverage products.

American Oriental said, the overall increase in sales was also supported by continuous marketing efforts, increase in new product offerings and expansion to rural markets.

Impacting the net income, total operating expenses increased to $29.12 million from $25.56 million and cost of goods sold shot up to $34.68 million from $23.40 million in the year-earlier quarter.

For the nine-month period, profit declined to $29.7 million or $0.39 per share from $39.2 million or $0.50 per share in the year-ago period. Excluding $3.8 million of interest expense on convertible securities and $0.7 million of amortized financing costs, the company's net income was $34.2 million or $0.39 per share. Revenue increased 16.5% to $196.1 million from $168.4 million.