Friday, American Oriental Bioengineering, Inc. (AOB), a manufacturer of prescription and over-the-counter drugs, reported a decline in earnings for the second quarter, hurt mainly by continued revenue mix shift to generic product sales, higher raw material costs and low margin distribution business.
The Shenzhen, China-based company's net income attributable to controlling interest for the quarter declined to $13.2 million, from $13.9 million in the corresponding period last year.
Excluding $1.4 million of interest expense and $0.2 million of amortized financing costs related to the outstanding convertible notes, net income attributable to controlling interest grew 6.5% to $14.8 million, or $0.17 per share. In the prior year's period, net income per share was approximately $0.18.
On average, five analysts polled by Thomson Reuters expected the company to earn $0.18 per share for the quarter. Analysts' estimates typically exclude special items.
Revenues advanced 20.7% to $71.2 million from $59 million in the same period last year. Four Street analysts expected the company to report revenue of $74.88 million for the quarter.
Revenue from pharmaceutical products increased 17.4% to $58.4 million. Revenue from prescription pharmaceutical products increased 23.2% to $25.2 million, while OTC pharmaceutical products revenue increased to $33.3 million from $29.4 million in the prior year's period.
In addition, the company said Nutraceutical products generated revenue of about $9.5 million, up 3.3% from $9.2 million in the prior year period. American Oriental generated $3.3 million from its distribution business.
Gross margin was 58.4%, down from 67.9% in the prior-year period, reflecting continued revenue mix shift to CCXA's generic product sales, increasing raw material prices and low margin distribution business.
For the six-month period, net income attributable to controlling interest declined to $21.1 million from $23.3 million in the corresponding period last year. Earnings per share declined to $0.28 from $0.30 per share in the corresponding period last year.
AOB closed Thursday's regular trading session at $5.24.
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