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Omnicare takes 2Q loss on litigation costs

Tue, 07/26/2011 - 10:45am
The Associated Press

Omnicare Inc., which dispenses drugs to nursing homes and long-term-care facilities, reported a loss for the second quarter after settling a lawsuit that accused it of overcharging Medicaid programs.

In September, Omnicare agreed to pay $21.1 million to the states of Michigan and Massachusetts. The payments settled investigations into allegations Omnicare broke state law by charging higher drug prices to Medicaid programs than to private health insurers. In the second quarter, the company reported a loss of $1.4 million, or a penny per share. Excluding the legal costs and other items, the company said it earned 50 cents per share. A year ago Omnicare earned $11.6 million, or 10 cents per share. Its revenue rose 4 percent, to $1.56 billion from $1.49 billion.

Analysts expected a profit of 49 cents per share and $1.53 billion in revenue, according to FactSet.

The company maintained its annual profit forecast of $2.05 to $2.15 per share, excluding one-time items, on $6 billion to $6.1 billion in revenue. Analysts expect a profit of $2.09 per share on $6.1 billion in revenue. Omnicare said it expects greater free cash flow.

In afternoon trading, shares of Omnicare rose $2.14, or 7 percent, to $32.53.

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