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Wind knocked out of Dura
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February 25, 1998: 12:52 p.m. ET
Asthma-drug firm blames bleak profit outlook on weak sales, marketing costs
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NEW YORK (CNNfn) - Dura Pharmaceuticals Inc.'s stock had the wind knocked out of it Wednesday after the asthma-drug company warned of slowing earnings and revenue in 1998.
The San Diego-based pharmaceuticals developer told investors late Tuesday of the shortfall after evaluating recent sales results, saying the total impact on earnings likely will be about 50 cents a share for 1998.
The profit shortfall will result in part from accelerated plans to expand the sales force from 270 representatives to over 450 by year-end. Dura officials said the added investment is needed to handle an anticipated increase in workload.
"Investing now in a significant sales and marketing effort ... improves the prospect of future revenue and earnings growth of the company," Cam L. Garner, chairman and chief executive, said in a prepared statement.
However, investors apparently were more concerned with the immediate impact of the revenue shortfall. Analysts at Merrill Lynch and BT Alex. Brown lowered their ratings of the stock.
At midday, Dura shares (DURA) were down 14-19/32 at 23-17/32 in active trading on the Nasdaq.
To be sure, Garner said, Dura remains financially stable, having an available cash balance of nearly $400 million.
"The proactive expansion of our sales force at this time clearly serves the long-term interests of the company and its shareholders," Garner added.
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Dura Pharmaceuticals
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