Israel-based Taro's first quarter net income declined 7 percent, while revenue fell 4 percent, which the company said was due to a one-time charge taken to meet contractual obligations.
Sun Pharmaceutical Industries shares tumbled 5 percent in morning trade on Thursday after the generics drug maker's subsidiary Taro Pharmaceutical Industries reported a 7 percent year-on-year drop in its first quarter earnings.
Israel-based Taro's first quarter net income dropped to about USD 59 million from about USD 63 million in the year ago quarter. Its net sales in April-June declined 4 percent to USD 153 million.
"The revenue decline is principally due to a net charge taken to meet contractual obligations associated with price adjustments made in the current quarter, the benefit of which should be realized in future periods," Kal Sundaram, CEO, Taro, said in a statement.
Excluding the one-time charge, Taro's sales for the three-month period would have increased over 10 percent year-on-year, Sundaram added.
For Q1, Taro's gross profit as a percentage of sales dropped to 69.7 percent from 71.7 percent. Operating income declined to USD 73.6 million, or 48 percent of net sales, compared with USD 79 million, or 49.6 percent of net sales, it said.
Sun Pharma will announce its first quarter earnings on Friday.
At 9:45hrs, Sun Pharma shares were down 2.1 percent at Rs 511.05 on NSE.