Bausch & Lomb sees 2006 revenue falling below previous guidance on slow recovery

Bausch & Lomb Inc. said Wednesday it expects revenue to fall below previous estimates, citing sluggish contact lens sales amid a slower-than-expected recovery from the worldwide recall of a solution blamed for an outbreak of severe fungal eye infections.

The optical products maker expects to book about $2.3 billion in sales for 2006, below its previous guidance of $2.33 billion to $2.4 billion. Analysts surveyed by Thomson Financial expect revenue of $2.33 billion.

Anticipated income before income taxes and minority interest of $74 million for 2006 will fall within previous estimates of between $70 million and $80 million, the company said.

The company also filed amended letter waivers with the Securities and Exchange Commission extending the termination date of current waivers to April 30. The waivers cover a five-year, $400 million revolving credit agreement and a five-year, $375 million term-loan agreement.

Bausch & Lomb's shares rose $1.46, or 2.7 percent, to $55.86 in late trading on the New York Stock Exchange. They have traded in a 52-week range of $40.75 to $72.99.

Bausch & Lomb, which hasn't filed an audited earnings report since mid-2005, has until March 1 to file its annual report for that year and said it believes a filing is "imminent."

Already beset by accounting irregularities at its Asian subsidiaries, Bausch & Lomb's share of U.S. lens care kits plunged from 31 percent to 8 percent before rebounding to 21 percent in the July-September period, according to Health Products Research in Whitehouse, N.J.

Consumer lawsuits have also been piling up in U.S. courts _ lawyers now expect 500 to 700 people will seek damages for Fusarium keratitis infections in trials beginning as early as this summer.

The lawsuits could wind up costing Bausch & Lomb $1 billion in damages, analyst David Maris of Banc of America Securities has estimated. Losing its dominance in the lucrative lens care market _ 34 million Americans wear contact lenses _ could prove even more draining.

Last May, Bausch & Lomb permanently withdrew its new-formula ReNu with MoistureLoc multipurpose lens cleaner from markets around the world when federal regulators called the $100 million-a-year product the "potential root cause" of an outbreak of potentially blinding infections.

A cluster of infections surfaced in Asia in fall 2005 and an unusual number of victims began showing up in U.S. eye centers last winter. The company stopped selling MoistureLoc in Hong Kong and Singapore in February but only halted U.S. shipments in April.

Without eye-drop treatment, which can take two to three months, the infection can scar the cornea and cause blindness.

Of the 180 infection victims confirmed so far in 35 states, 59 needed cornea transplants to try to restore their vision, the Centers for Disease Control and Prevention in Atlanta said. Several people allege the MoistureLoc solution caused them to lose an eye.

In addition, as many as 1,500 to 3,500 people will claim they contracted other fungal, viral or bacterial infections while using MoistureLoc, predicted Paul Pennock, chief of pharmaceutical and medical device litigation at Weitz & Luxenberg, a law firm in New York.