A couple of quarters after it swallowed a giant competitor, Barr Pharmaceuticals (NYSE:BRL) appears on track to increase year-over-year revenues.

Motley Fool Stock Advisor recommendation Barr saw revenues increase to $637 million in the second quarter, from $352 million a year ago. The huge jump in sales was due to the October addition of products from the acquisition of Croatian drugmaker Pliva. The addition of Pliva opened up 30 markets for Barr and provided it with 550 products.

The acquisition should help Barr compete in the bigger-is-better world of generic drugs. Since Mylan Labs (NYSE:MYL) grabbed Merck KGaA's generics business, Barr trails generic-drug-makers Teva (NASDAQ:TEVA) and Novartis (NYSE:NVS).

However, Barr wasn't able to translate the increase in revenues into an increase in the bottom line. Barr reported earnings from continuing operations of $45.9 million, down from $82.3 million in the same quarter last year. The earnings were dragged down by interest expenses of $42 million, almost all of which is from the $2.6 billion debt it took on to finance the Pliva buyout. Barr is hoping to refinance some of that dept into longer-term bonds, but is waiting until the debt markets settle down a bit. I hope Barr doesn't wait too long; it would be nice to free up some of its cash flow to grow the business instead of paying interest charges.

Sales of Barr's branded drugs were up a paltry 5% year over year for the quarter, but its SEASONALE contraceptive began facing generic competition last fall, so any increase is a welcome one. Most of the increase was due to the launch of its over-the-counter "Plan B" emergency contraceptive, which appears to be going smoothly. Barr earns much higher gross margins on its branded drugs, so it would be nice to see that segment grow.

Last week, Barr's chief operating officer, Paul Bisaro, announced that he was leaving to become CEO of Watson Pharmaceuticals (NYSE:WPI). There was concern that Bisaro's departure would derail the integration of Pliva, but I think the assimilation is far enough along that his exit shouldn't be a problem.

It will be nice in a couple of quarters when investors can make meaningful year-over-year revenue comparisons. In the meantime, investors should look for increasing margins as the companies continue to merge. As long as Barr can leverage its new debt, its acquisition will pay off for investors in the years to come.

Want to know the latest drug stock we've picked for the Fool's market-beating Rule Breakers newsletter? Click here to take a look at all our recommendations with a free, 30-day trial.

Fool contributor Brian Orelli, Ph.D., doesn't own shares of any company mentioned in this article. The Fool has a disclosure policy.