By Lisa Seachrist
WASHINGTON — Chiron Corp. recorded a net loss of $14 million, or 8 cents per share, for the third quarter of 1997, largely as result of a one-time charge against earnings to write off its Puerto Rican manufacturing plant and other restructuring and consolidating maneuvers.
Without the $31 million impairment loss on its Puerto Rican Betaseron plant, the Emeryville, Calif., company showed a 33 percent increase in after-tax income from continuing operations of $17 million, or 10 cents a share, for the third quarter of 1997 compared with $13 million, or 7 cents per share, in the same period last year.
The company also reported the after-tax results of Chiron's ophthalmic business unit as discontinued operations. Chiron announced Oct. 21 Bausch & Lomb, of Rochester, N.Y., would acquire all assets of Chiron Vision Corp. for $300 million in cash.
The transaction is subject to regulatory approval but is expected to be completed in early 1998. Including $1 million in net income from its vision division, Chiron's quarterly loss is at $13 million, or 7 cents per share.
Chiron also benefited from an inaugural $8 million sale of the platelet-derived growth factor (rhPDGF-BB) to Johnson & Johnson for the production Regranex Gel — a wound healing agent. Regranex garnered an FDA advisory panel recommendation for approval on July 14. The agency has yet to clear Regranex for marketing and Chiron cannot expect any further revenues from rhPDGF-BB until such an approval is granted.
The company's Betaseron revenues were up $1 million to $21 million in the third quarter of this year compared with last year. And sales of Chiron's branched DNA diagnostics kits were up by more than 50 percent compared with the third quarter 1996.
Nine-Month Income Off By 50 Percent
Eric Schmidt and Tim Wilson, analysts with UBS Securities Inc., of New York, wrote in their note on the quarterly earnings that Chiron's revenues were less than anticipated for both the diagnostics and vaccine businesses, as well as for Betaseron.
Schmidt and Wilson noted the weakness in revenues continued to come from unfavorable foreign exchange rates.
For the first nine months of 1997, Chiron's net income decreased by $21 million to $18 million, as compared with the first nine months of 1996. That loss translates to nine-month earnings of 10 cents per share for 1997 compared with 22 cents per share for the first nine months of 1996.
The company has told analysts that 1997 earnings should be in the low 40-cent range. However, Schmidt and Wilson have lowered their estimate of 41 cents per share to 19 cents per share in light of the third quarter results.
Chiron's stock (NASDAQ:CHIR) closed Tuesday at $19.75, up $0.50. *