UPDATE 1-Lundbeck misses forecasts as higher costs cut earnings

Wed Feb 6, 2013 2:58am EST

Related Topics

* Q4 op profit 222 mln crowns vs f'cast 480 mln

* Rev 3.85 billion crowns vs f'cast 3.76 bln

* To pay div of 2.00 crowns/shr (Adds details, analyst comment)

COPENHAGEN, Feb 6 (Reuters) - Danish drugmaker Lundbeck missed fourth-quarter expectations on Wednesday as higher-than-forecast costs cut into earnings.

The company said it made an operating profit of 222 million Danish crowns ($40.3 million), less than half the expected 480 million in a Reuters poll and down from 326 million in the same period the year before.

Revenue reached 3.85 billion crowns, just beating expectations of 3.76 billion.

"The earnings surprised me ... It is due to costs which are higher than forecast in the fourth quarter," Sydbank analyst Soren Hansen said.

"Costs related to sale and product launches, administrative costs and research and development ... are higher than expected," Hansen said.

The company said it would pay a dividend of 2.00 crowns per share and repeated forecasts for this years' revenue to be in a range of 14.1 billion crowns and 14.7 billion, and operating profit to be between 1.6 billion and 2.1 billion.

Just last December the company had issued a profit warning and cut its financial outlook for this year and 2014, on the back of sluggish European markets and higher costs related to investment in new products.

It said earnings would stall until 2015 due to cheap generic competition for its existing drugs, meaning new products will be vital for future earnings.

The company has been hurt by the negative impact on revenue from healthcare reforms in Europe and slowing European sales and generic competition.

Lundbeck is working to find new drugs to replace lost revenue from products coming off patent protection, such as its antidepressant Cipralex, which is sold as Lexapro in the United States and Japan, and Alzheimer's drug Ebixa.

($1 = 5.5139 Danish crowns) (Reporting by Johan Ahlander; Editing by David Holmes)

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