Bausch & Lomb said this week that the ReNu with MoistureLoc withdrawal would mean that its 2006 pre-tax profit would fall from the $325-335m it predicted in October 2005 to an expected $70-80m.
It has lost sales and faces legal expenses, including possible court cases by users of the solution, sales of which were about $100m last year.
The company said it would also make an allowance of $120-150m for MoistureLoc-related losses. Lens care products are the most profitable of B&L’s five product categories.
The company has also restated its earnings back to 2001 and delayed its second quarter 2006 financial filing, known as 10-Q, beyond the August 10 deadline because of an investigation into financial controls and reserves.
B&L declared a quarterly dividend of $0.13 per share at the end of July, payable to shareholders on October 2.
B&L’s shares closed at $46.34 on Monday. They have fallen 32 per cent this year.
Meanwhile, the supermarket Sainsbury’s blamed human error for the appearance on its shelves last week of half a dozen bottles of the ReNu with MoistureLoc contact lens solution, which Bausch & Lomb withdrew in May in the UK because of health concerns.
However, Sainsbury’s claimed that a software block on its tills, following its red alert on May 16 telling its stores to withdraw the product immediately, would have prevented any sale of the solution.
Bottles of ReNu with MoistureLoc, which has been linked to the eye infection Fusarium keratitis, continue to be found elsewhere in the UK. The supermarket Tesco, for example, is now investigating the display in its Lydney, Gloucestershire store of a bottle of ReNu with MoistureLoc on a bargain bin shelf. Optician alerted Tesco to the find after an optician found the bottle.
Tesco also said that a till lock would have prevented the sale of the product.