September 3, 2010 / 9:59 PM / 9 years ago

UPDATE 1-China Sky One cuts view as distributors end contracts

* Distributors claim SEC disclosures raise China’s scrutiny

* Co sees FY 2010 revenue $128-$136 mln

* Sees 2010 adj net income $26-$31 mln

* Sees higher H2 costs to sign new distributors

* Shares down 30 pct in extended trade

Sept 3 (Reuters) - China Sky One Medical Inc CSKI.O said several of its private distributors terminated their contracts, claiming information disclosed in its U.S. regulatory filings attracted increased scrutiny from Chinese authorities, prompting the company to slash its outlook.

The over-the-counter drugmaker’s shares, which have lost more than 60 percent since touching a life high in December, fell 30 percent to $6.83 in extended trade Friday.

The Harbin, China-based company also said its Chief Financial Officer Stanley Hao resigned, citing health reasons.

For the full year, China Sky One now sees revenue of $128-$136 million, down from its prior outlook of $160-$164 million.

It forecast adjusted net income of $26-$31 million for the period, compared with its previous view of $40-$41 million.

The company expects to incur higher costs in the second half to sign new distributors. (Reporting by Krishnakali Sengupta in Bangalore; Editing by Vinu Pilakkott)

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