Hi-Tech Pharmacal Co., Inc. reported fourth quarter fiscal 2013 (ended Apr 30, 2013) earnings of 50 cents per share, well below the Zacks Consensus Estimate of 68 cents and down 38.3% from the year-ago period. Lower-than-expected revenues contributed to the earnings miss in the final quarter of fiscal 2013.
Fourth quarter revenues were $58.5 million, down 4.6% year over year. Revenues missed the Zacks Consensus Estimate of $66 million.
Revenues at Hi-Tech Pharmacal were hurt by lower sales of Fluticasone nasal spray. Lower pricing hurt the sales of the drug. A slower-than-normal start to the allergy season also led to the weak revenues recorded in the quarter..
Fiscal year 2013 earnings were $2.28 per share, down 40.8% year over year. The Zacks Consensus Estimate for fiscal 2013 stood at $2.40 per share. Revenues in 2013 rose 10.4% year over year to $232.4 million. Revenues for 2013 were below the Zacks Consensus Estimate of $239 million.
Research and development expenses for fiscal 2013, increased 41.4% year over year to $17.3 million due to increased spending on internal projects for the generic pharmaceuticals division. Selling, general and administrative expenses rose 19.9% to $53.6 million in fiscal 2013 due to costs incurred towards restructuring of sales organization.
Hi-Tech Pharmacal reports revenues under three segments – generic pharmaceuticals (Hi-tech generic), OTC branded pharmaceuticals (Health Care Products) and prescription brands (ECR).
Revenues at the generic pharmaceuticals segment in the reported quarter were down 7.2% year over year to $48.9 million. Lower revenues of Fluticasone Propionate nasal spray (down 31% year over year to $19.6 million) were primarily responsible for the decline.
Revenues at the Health Care Products division were down 7% from the prior-year quarter to $4.9 million. Sales continued to be affected by lower sales of diabetes drug Tussin.
Sales from the ECR division increased 40% to $4.7 million mainly driven by TussiCaps and Bupap sales.
Hi-Tech Pharmacal expects a top line growth this year across all its businesses. The new generic launches will drive the generic increase. However, Hi-Tech Pharmacal expects declining sales of Fluticasone. Hi-Tech Pharmacal expects double-digit growth in its Health Care Products and ECR divisions.
Hi-Tech Pharmacal carries a Zacks Rank #3 (Hold). Right now, companies like Santarus, Inc. , Lannett Company, Inc. (LCI - Snapshot Report) and Jazz Pharmaceuticals (JAZZ - Analyst Report) look well positioned in the pharma space with a Zacks Rank #1 (Strong Buy).