Lowering the Barr (BRL)

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Who thought generics could ever look so bad?  This morning, Barr Pharmaceuticals (NYSE: BRL) has posted very poor numbers.

The company posted $0.57 EPS, far under the First Call consensus of $0.79. Revenues rose 1.8% year over year to $608 million, while $684.1 million was the consensus estimate. To make matters worse, its mixed guidance for Fiscal 2008 was put at $2.75 to $3.05 EPS. This is under the $3.27 consensus estimate and down from previous range of $3.05-$3.35 EPS for the year.  The company did keep 2008 revenues in a range of $2.7 to $2.8 billion, and First Call had estimates of $2.78 Billion.

Barr noted that the reduction to its poor results was on U.S. generic revenue coming in lower than expected.  The company also noted that it does not expect this to be completely offset by the expected launch of its generic birth control pill in 2008.

Brand name drug sales are seeing issues almost weekly, the pressure is on to lower healthcare costs, and somehow generic sales are weak.  Is the economic weakness to the point that people decided they can’t afford their co-pay rates?

Based on the crummy report, no one is giving the company the benefit of the doubt.  Shares are now at a new 52-week low this morning.  Shares are down more than 20% at $38.50 in early trading.  Its prior 52-week trading range was $45.33 to $58.38.

To make matters worse, the company broke its stock chart too.

Jon C. Ogg
May 8, 2008