Omnicare Inc. (OCR) swung to a fourth-quarter profit as
drug-price hikes more than offset spending cutbacks by consumers
and hospitals.
The geriatric-pharmaceutical company also gave a full-year
earnings outlook that beat Wall Street's estimates. Omnicare sees
2009 earnings, excluding items, of $2.50 a share to $2.70 a share.
Analysts were expecting $2.38, according to Thomson Reuters.
"Given the strategies we have in place, the advantages of our
scale position and the ongoing trends in the pharmaceutical
marketplace, we believe we are positioned for continued growth,"
said Chief Executive Joel F. Gemunder.
Shares rose 5.3% premarket to $29 as the latest quarter's
earnings also topped expectations. The stock through Wedensday is
up 16% in the past year.
Omnicare dispenses drugs to nursing homes, assisted-living
centers and other long-term care facilities in the U.S. and parts
of Canada. Net income totaled $31.7 million, or 27 cents a share,
compared with a year-earlier net loss of $20.8 million, or 17 cents
a share.
The latest results included $48.1 million, or 39 cents a share,
in charges from a lawsuit against UnitedHealth Group Inc. (UNH)
tied to a reduction in reimbursement rates. In October, the company
projected earnings, excluding items, of 62 cents to 64 cents, well
above analysts' then-estimates.
Net sales rose 2.7% to $1.6 billion. Analysts were most recently
expecting $1.61 billion.
A federal judge recently approved UnitedHealth's request for a
summary judgment in the 2006 lawsuit, in which Omnicare accused
UnitedHealth and PacifiCare of conspiring before their merger to
reduce Medicare prescription-drug payments to Omnicare.
Gross margin rose to 26% from 24.4%.
Operating profit in the pharmacy-services unit more than tripled
on a $94 million bad-debt allowance a year earlier.
-By Mike Barris, Dow Jones Newswires; 201-938-5658;
mike.barris@dowjones.com