Allergan 2Q Net Up 23% On Cost Cuts; 3Q Earns View Weak

   DOW JONES NEWSWIRES 
 

Allergan Inc.'s (AGN) second-quarter profit rose 23% on declines in overhead and research costs, but currency changes ate into revenue at the eye and skin-care products company.

While the quarter's results topped analysts' estimates and the maker of Botox and the nation's largest seller of medical products for appearance-enhancement treatments raised the lower end of its 2009 outlook, it forecast weaker-than-expected earnings this quarter.

Allergan sees income of 67 cents to 69 cents a share, on product sales of $1.05 billion to $1.1 billion. Analysts surveyed by Thomson Reuters projected earnings of 72 cents and total revenue of $1.07 billion.

Makers of aesthetic medical treatments are feeling pressure from the slumping economy as customers trim cosmetic procedures from their budgets. Allergen has cut 5% of its work force, mainly targeting its U.S. urology sales force and marketing staff in the U.S. and Europe.

Allergan said second-quarter earnings rose to $176.1 million, or 58 cents a share, from $143.4 million, or 47 cents a share, a year earlier. Excluding acquisition and other impacts, profit rose to 75 cents from 63 cents.

Product net sales fell 3.2% to $1.12 billion, but rose 2.2% in constant currencies.

In May, Allergan forecast earnings, excluding items, of 66 cents to 68 cents on product sales of $1.05 billion to $1.1 billion.

Profit in the latest quarter rose thanks to a 13% drop in overhead costs and a 24% decline for research and development.

Pharmaceutical sales were down 0.6%, but rose 4.8% excluding currency changes, while a 14% drop in medical-device revenue was 8.5% on an adjusted basis.

Botox sales fell 3.2% on foreign-exchange impacts.

Allergan shares were up 20 cents at $52.75 in recent trading. The stock is up just 31% this year.

-By Mike Barris, Dow Jones Newswires; 212-416-2330; [e-mail]