Drug maker swings to profit

Generic drug maker Watson Pharmaceuticals Inc. reported a fourth-quarter profit that beat analysts’ estimates, compared with a year-earlier loss tied to research costs.

Net income was $38.4 million, or 34 cents a share, the Corona-based company said. A year ago, Watson reported a loss of $489 million, or $4.80. Earnings excluding one-time items beat by 4 cents the 31-cent-a-share estimate of analysts surveyed by Bloomberg.

Revenue increased about 1% to $627.3 million, as a new distribution business made up for a drop in both generic and brand-name drug sales.

Investors have waited for Watson to introduce new products as sales of older drugs decline, and analysts say its plans to recertify a Florida manufacturing plant this year and submit three new brand-name drugs to regulators are steps in the right direction. The company has also hired executives from rivals to help ignite growth.

Watson predicted that 2008 revenue would be little changed at about $2.5 billion and adjusted earnings would rise to $1.90 to $2 a share, from $1.37 a share in 2007.

Shares fell 11 cents to $28.21.