Jean Coutu profit misses estimates as generic drugs get cheaper

Reuters

* 2nd-qtr adjusted earnings C$0.24/shr vs est. C$0.25

* Same-store sales fall 0.1 pct

Oct 9 (Reuters) - Canadian pharmacy chain Jean Coutu GroupInc reported a lower-than-expected quarterly profit asit sold more generic drugs at lower prices.

Price-controls for generic drugs, aimed at cutting costs forgovernment and private health programs, have hurt Jean Coutu andrivals such as Shoppers Drug Mart.

Prices of six commonly prescribed generic medicines, as apercentage of the branded drugs, have fallen to 18 percent from25-40 percent.

Québec-based Jean Coutu, which operates 411 franchisedstores in Québec, Brunswick and Ontario, said 67.2 percent ofprescriptions were for generics during its second quarter, upfrom 61 percent a year earlier.

Revenue fell slightly to C$653.8 million ($633 million) fromC$658.7 million a year earlier. Same-store sales, a key measurefor retailers, fell marginally, compared with a 2.6 percent risea year earlier.

Net profit rose to C$208.2 million, or 99 Canadian cents pershare, for the three months ended Aug. 31, from C$51.2 million,or 23 Canadian cents per share, a year earlier.

Excluding gains from the sale of its stake in drugstorechain Rite Aid Corp in July, Jean Coutu earned 24Canadian cents per share.

Analysts on average had expected adjusted earnings of 25Canadian cents per share on revenue of $651.60 million,according to Thomson Reuters I/B/E/S.

Jean Coutu's shares, which have climbed 24 percent thisyear, closed at C$18.91 on the Toronto Stock Exchange onTuesday.

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