Bausch & Lomb cuts more jobs, settles patent lawsuit with Visx

Both makers of lasers for correcting vision cut their earnings forecasts

January 06, 2001|By BLOOMBERG NEWS

NEW YORK - Bausch & Lomb Inc. said yesterday that it plans to cut another 350 jobs after its fourth-quarter profit missed estimates because of slowing demand for vision-correction surgery, and the company lowered its 2001 earnings forecast a third time.

The No. 3 maker of contact lenses also said it settled a patent lawsuit filed by rival Visx Inc., agreeing to pay Visx an unspecified royalty for each Lasik eye-surgery procedure in the United States done with Bausch & Lomb's lasers.

A slowing U.S. economy has lowered demand for laser eye surgery, an elective procedure most insurance plans don't cover. Bausch & Lomb, the latest entrant into a competitive market led by Visx, said it expects to earn $2.35 to $2.40 a share in 2001, lower than the $2.70 average estimate of analysts.

"Today's announcement is an admission that the [vision-correction] market is slowing, and they aren't going to be able to take as much of the market share as they thought they could," Banc of America Securities analyst Ted Huber said.

Fourth-quarter profit was 69 cents to 71 cents a share, short of the 73-cent average estimate. Including charges and a gain, the company expects to report fourth-quarter income of 5 cents to 7 cents a share.

Bausch & Lomb shares fell $1.25 to close at $37.75 yesterday. They've lost about half their value since July. Shares of Visx rose $1 to close at $12 yesterday.

Last week, Visx said it would report lower-than-expected fourth-quarter earnings before charges because of slowing demand for the procedure.

In the settlement, Visx and Bausch & Lomb agreed to license each other's patents for excimer lasers used in surgery to reshape a patient's cornea to improve vision.

The settlement strengthens Visx's position in a patent-infringement lawsuit it filed against rival Nidek Co., Huber said.

Bausch & Lomb's latest job cuts are in addition to 450 it announced in October, spokeswoman Barbara Kelley said. The company, which employs about 13,000 people worldwide, expects the job cuts to save $20 million this year and $40 million a year thereafter.

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