American Home Products yesterday took a much-higher-than-expected $7.5 billion charge to cover liabilities related to two recalled diet drugs, while also posting a 17 per cent rise in operating earnings for the fourth quarter, meeting Wall Street forecasts.

Including charges and exceptional items, the group, which employs about 1,500 people in Ireland, reported a net loss of $3.82 billion, compared with a profit of $593 million in the 1999 quarter.