Forest Labs Profit Beats, But Outlook Sluggish

Forest Laboratories on Tuesday posted a better-than-expected profit, but shares fell 7.5 percent as the mid-sized drugmaker projected only slightly higher full-year earnings due to expenses to improve its product line.

The drugmaker reported a fiscal fourth-quarter profit of $172.8 million, or 55 cents per share.

That compared with a net loss of $237.9 million, or 75 cents per share, a year ago, when Forest took a big charge for an acquisition.

Excluding a 35-cent per-share charge for a licensing payment, earnings of 90 cents were 12 cents ahead of the average estimate from analysts, according to Reuters Estimates.

Revenues for the quarter rose 12 percent to $990.9 million.

Sales of the anti-depressant Lexapro rose 9 percent to $577.2 million.

Sales of Alzheimer's treatment Namenda climbed 26 percent to $179.7 million.

The New York-based company projected fiscal-year earnings of $3.10 to $3.20 per share, up only slightly over the $3.06 it posted for its 2008 fiscal year.

Analysts on average expected $3.53 per share for the fiscal year, but that figure was not directly comparable because the estimate excluded milestone payments, according to Reuters Estimates.

Forest expects about $100 million in planned research and development milestone payments for the year.

Forest is trying to build up its product line before Lexapro and Namenda lose U.S. patent protection early next decade, leading to competition from low-cost generic drugs that will leave a hole in the company's revenue.

Shares fell to $36.80 in pre-market electronic trading from $39.80 at Monday's close on the New York Stock Exchange.