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Rhone 2Q earnings up 16%
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July 28, 1999: 7:55 a.m. ET
But French drug maker net dips due to charges related to Hoechst merger
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LONDON (CNNfn) - France's Rhone-Poulenc reported a 16 percent increase in second-quarter operating profits Wednesday, though the pharmaceutical firm's net earnings dipped after charges related to its planned merger with Germany's Hoechst.
Operating income climbed to 525 million euros ($559 million) from 445 million euros a year earlier, with the advance beating most analysts' expectations. Market observers also pointed out that the year-earlier data was inflated by a 436 million euro gain from the stock offering for its chemical arm, Rhodia.
However, net earnings fell 82 percent in the most recent quarter after 156 million euros in charges related to the Hoechst deal and fines to settle an antitrust suit in the animal vitamin sector.
Rhone-Poulenc and Hoechst plan to complete their merger later this year, spinning off their chemical assets to form a new life science-based firm called Aventis. With a market capitalization of around $60 billion, Aventis will rank behind only Switzerland's Novertis in the global life-sciences sector.
The French firm's life business posted the strongest returns in the second quarter, with operating returns advancing 6.7 percent while the chemical business posted a 6.7 percent decline.
Total sales in the quarter climbed 1 percent to 3.49 billion euros.
Rhone-Poulenc Chairman and CEO Jean-René Fourtou said the merger plan was progressing after approval from both sets of shareholders. "We are confident in our ability to deliver full-year earnings per share in line with market expectations of some 15 percent," he added in a statement.
Rhone-Poulenc (PRRP) shares climbed 1.25 euros, or 0.5 percent, to 46.95 euros in Wednesday midday trading, while Rhodia (PRHA) rose by 0.65 percent to 20.23 euros. 
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Rhone-Poulenc
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