Max
02-05-2002, 11:30 AM
Elan Slashes 2002 Earnings Forecast
By SHAWN POGATCHNIK, Associated Press Writer
DUBLIN, Ireland (AP) - Ireland's biggest pharmaceutical company, Elan Corp., slashed its 2002 earnings forecast on Monday, shocking Wall Street analysts and sending its shares tumbling.
The Dublin-based company said earnings this year would likely slide to a range of $570 million to $610 million, down from $696.5 million in 2001. This meant projected earnings per share of $1.55 to $1.65, down from 2001's $1.91 per share.
Analysts had been expecting Elan's per-share earnings forecast to come in around $2.35.
``This is an unmitigated disaster. It paints an even more negative picture than our long-standing pessimistic outlook,'' said David Maris, an analyst at CSFB in New York. He said the Elan's forecasts raised doubts about ``whether or not the company is actually making money.''
The company's shares plummeted on various exchanges. In Dublin, Elan stock fell 8.20 euros to 25.80 euros. In London, shares fell 8.35 pounds to 12.20 pounds. On the New York Stock Exchange, shares fell $15.10, or more than 50 percent, to close at $14.85 each.
Elan said new products would be introduced more slowly than expected in 2002, while a rationalization of other product lines last year would not produce as much savings as expected. The company also listed areas of higher-than-expected spending on research and development and new facilities.
Monday's announcement followed a report last week by The Wall Street Journal raising questions about Elan's use of accounting practices involving joint ventures to conceal losses.
Donal Geaney, Elan's chairman and chief executive officer, defended Elan's accounting practices and dismissed the Journal's report as ``a rehash of old news about matters that have been fully discussed.''
Elan's shares fell to $22.40 in New York last week on the weight of the Journal report before rebounding to near $30.
The drug maker also reported sharply lower fourth quarter earnings, saying Monday that net income for the fourth quarter totaled $8.5 million compared with $54 million in the year-earlier period.
Geaney predicted Monday that 2002 revenue growth would be led by Zanaflex, which is used to relieve pain for people with spinal cord injuries. U.S. sales of Zanaflex rose 78 percent last year to $162 million, the company said, making it Elan's biggest seller.
Elan, which has research facilities in Ireland, Britain and the United States, markets therapeutic products and services in neurology, pain management, oncology, infectious disease and dermatology.
Last month, Elan and its development partner American Home Products Corp. suspended trial tests of their treatment for Alzheimer's disease after detecting unexpected side effects in four of the study's 97 participants.
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On the Net:
http://www.elan.com/NewsRoom/NewsYear2002/AnnualResult2001.asp
By SHAWN POGATCHNIK, Associated Press Writer
DUBLIN, Ireland (AP) - Ireland's biggest pharmaceutical company, Elan Corp., slashed its 2002 earnings forecast on Monday, shocking Wall Street analysts and sending its shares tumbling.
The Dublin-based company said earnings this year would likely slide to a range of $570 million to $610 million, down from $696.5 million in 2001. This meant projected earnings per share of $1.55 to $1.65, down from 2001's $1.91 per share.
Analysts had been expecting Elan's per-share earnings forecast to come in around $2.35.
``This is an unmitigated disaster. It paints an even more negative picture than our long-standing pessimistic outlook,'' said David Maris, an analyst at CSFB in New York. He said the Elan's forecasts raised doubts about ``whether or not the company is actually making money.''
The company's shares plummeted on various exchanges. In Dublin, Elan stock fell 8.20 euros to 25.80 euros. In London, shares fell 8.35 pounds to 12.20 pounds. On the New York Stock Exchange, shares fell $15.10, or more than 50 percent, to close at $14.85 each.
Elan said new products would be introduced more slowly than expected in 2002, while a rationalization of other product lines last year would not produce as much savings as expected. The company also listed areas of higher-than-expected spending on research and development and new facilities.
Monday's announcement followed a report last week by The Wall Street Journal raising questions about Elan's use of accounting practices involving joint ventures to conceal losses.
Donal Geaney, Elan's chairman and chief executive officer, defended Elan's accounting practices and dismissed the Journal's report as ``a rehash of old news about matters that have been fully discussed.''
Elan's shares fell to $22.40 in New York last week on the weight of the Journal report before rebounding to near $30.
The drug maker also reported sharply lower fourth quarter earnings, saying Monday that net income for the fourth quarter totaled $8.5 million compared with $54 million in the year-earlier period.
Geaney predicted Monday that 2002 revenue growth would be led by Zanaflex, which is used to relieve pain for people with spinal cord injuries. U.S. sales of Zanaflex rose 78 percent last year to $162 million, the company said, making it Elan's biggest seller.
Elan, which has research facilities in Ireland, Britain and the United States, markets therapeutic products and services in neurology, pain management, oncology, infectious disease and dermatology.
Last month, Elan and its development partner American Home Products Corp. suspended trial tests of their treatment for Alzheimer's disease after detecting unexpected side effects in four of the study's 97 participants.
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On the Net:
http://www.elan.com/NewsRoom/NewsYear2002/AnnualResult2001.asp