Aceto Corp (NASDAQ: ACET) reported Q2 EPS of $0.19, $0.09 worse than the analyst estimate of $0.28. Revenue for the quarter came in at $124.8 million versus the consensus estimate of $136.7 million.

Management Commentary

"The third quarter of fiscal 2014 earnings performance was below that achieved last year primarily as a result of quarterly timing. That said, for the first nine months of fiscal 2014, I am very pleased with ACETO's performance, having achieved net income of $23.4 million, or diluted earnings per share of $0.82, compared to $16.9 million, or diluted earnings per share of $0.62, for the first three quarters of last year, representing increases of 38.5% for net income and 32.3% for EPS," said Sal Guccione, Chief Executive Officer of ACETO.

Mr. Guccione continued, "In the third quarter of fiscal 2013, Aceto saw strong sales and profits of a higher-margin pharmaceutical ingredient, which recurred in early fiscal 2014 and, as expected and previously noted, did not repeat in the third quarter of fiscal 2014. In addition, sales and profits in our Human Health segment were impacted this fiscal quarter by increased competition on first-to-market products that were successfully launched last year coupled with a lower number of new drug launches in the current year. This resulted in a 6.5% decrease in sales and an 8.8% decrease in segment gross profit for the quarter. As previously indicated, we increased our research and development spending during the third quarter of this fiscal year in support of our pipeline of generic finished dosage product candidates. R&D expenses were $1.5 million for the quarter versus $0.9 million last year."

Mr. Guccione also noted, "Regarding the Performance Chemicals segment, we saw improved profits on lower sales. This is due to an improved product mix, including higher gross margin contributions from the recent acquisition of Inter'actifs and decreased sales of lower margin products."

Mr. Guccione concluded, "We remain focused on our long-term strategy of investing in and expanding our finished dosage generic pharmaceutical business. The increased R&D spend, coupled with our acquisition of PACK Pharmaceuticals, are important steps in executing this strategy. We are very pleased with the continued growth achieved by our Human Health segment, with sales and gross profits each increasing in excess of 20% through the first nine months of this fiscal year. At the same time, we remain focused on achieving incremental growth from both the Pharmaceutical Ingredients and Performance Chemicals segments."

For earnings history and earnings-related data on Aceto Corp (ACET) click here.