Chiron reduces 2004 earnings by $6 million

/ Source: The Associated Press

Biotechnology company Chiron Corp., still struggling to recover from its high-profile failure to deliver half the nation's flu vaccine last year, said Tuesday its 2004 profit was $6 million less than originally reported.

Chiron, based in Emeryville, said it earned $54 million, or 28 cents a share in 2004 instead of the $60 million, or 32 cents a share, it had reported in January.

The company said "material weaknesses in internal controls over financial reporting," including the improper recording of sales in the second quarter, are prompting the company to revise the last three quarterly financial reports of 2004. The company also said it mishandled the reporting of taxes and legal expenses.

The company faces myriad federal investigations and investor lawsuits because of its failure to deliver about 48 million flu shots last year. British regulators barred Chiron in October from shipping the company's Fluvirin from its Liverpool, England factory because of contamination concerns.

The mishap cost the company an estimated $300 million in lost sales and Chiron took a $91 million charge in the third quarter last year because of the vaccine debacle.

British regulators last week authorized Chiron to resume vaccine manufacturing and the company said it's optimistic the U.S. Food and Drug Administration will allow it to ship Fluvirin for the next flu season.

The company announced its restatement plans after the stock markets closed Tuesday. Chiron shares fell 90 cents, or 2.4 percent, in extended trading after finishing the regular Nasdaq session at $38.01.