UPDATE 2-Jean Coutu misses estimates; generic drugs take bite

Wed Oct 9, 2013 12:59pm EDT
 
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* 2nd-qtr adjusted earnings C$0.24/shr vs est. C$0.25

* Same-store sales fall 0.1 pct

* Stock falls as much as 6 pct (Adds CEO comments, details on share buyback and dividend, industry background, analyst comment, updates stock price)

By Sneha Banerjee and Solarina Ho

Oct 9 (Reuters) - Canadian pharmacy chain Jean Coutu Group Inc reported a lower-than-expected quarterly profit on Wednesday, hurt by ongoing regulations that have capped the prices companies can charge for generic drugs.

The results sent shares down as much as 6 percent, though the shares pared some of the losses by afternoon.

Government-imposed price controls for generic drugs, aimed at cutting costs for government and private health programs, have hurt Jean Coutu and rivals such as Shoppers Drug Mart Corp , which is being acquired by Loblaw Co Ltd.

The C$12.4 billion ($11.93 billion) Loblaw-Shoppers deal, spurred by increasing competition in the Canadian retail landscape, has also sparked questions about how industry consolidation could affect Jean Coutu.

Jean Coutu executives reiterated their interest in expanding in Ontario and other provinces, adding that any acquisitions would likely be minor, such as buying independent drug stores.   Continued...