KV Pharma sees Q2 loss, withdraws '09 view; shares sink
(Reuters) - Shares of K-V Pharmaceutical Co (KVa.N) (KVb.N) lost more than half of their value after the company reported a preliminary loss for the second quarter below analysts' estimates and withdrew its 2009 earnings and revenue outlook.
In a filing with the U.S. Securities and Exchange Commission, the company, which is conducting an internal investigation on several allegations including regulatory compliance issues and management misconduct, said it recalled several products on Nov 7 and Nov 10.
KV Pharmaceutical had earlier recalled several different products from retail markets and consumers citing the possible presence of oversized tablets.
It also said four lawsuits have been filed against the company's unit Ethex Corp, related to the products recalled in June, including one that was seeking a nationwide class certification.
In the filing, the company said the recall in October and November affected 18 of its generic products, for which it added an estimated charge of $2.8 million in the second quarter.
FTN Midwest analyst Tim Chiang believes the negative impact from the recalls could be rectified, but the real issue now was the company's branded business segment.
Net loss for the second quarter is estimated to be $3.0 million, or 6 cents per class A share. Revenue for the quarter is estimated to be $144.3 million.
Analysts on an average were expecting earnings of 38 cents, before items, on revenue of $161.4 million, according to Reuters Estimates. Class A shares of the company fell to a 52-week low of $5.05, before recovering slightly to trade at $5.33 Thursday afternoon on the New York Stock Exchange.
(Reporting by Esha Dey and Vidya L Nathan in Bangalore; Editing by Pratish Narayanan, Jarshad Kakkrakandy)
