Bristol-Myers Cuts $2.5 Billion From 1999-2001 Sales (Update2)
By Joe Richter
New York, March 10 (Bloomberg) -- Bristol-Myers Squibb Co., the fourth-biggest U.S. drugmaker, reduced sales reported for 1999 through 2001 by about $2.5 billion because of a failed discounting strategy for wholesalers.
The company cut earnings from continuing operations for the same period by about $900 million, it said in a release on PR Newswire. It restated results in the first six months of 2002 to add $201 million to profit and $653 million to revenue.
Bristol-Myers reiterated its forecasts for 2003. With the restatement over, Chief Executive Officer Peter Dolan may start to win back investor confidence, some shareholders said before the release.
``As bad as the news has been, they are dealing with the issues one by one,'' said Marty Bukoll, an analyst at Northern Trust, which manages about $320 billion and owns Bristol-Myers stock. ``The restatement won't affect performance going forward.''
Bukoll's firm added 268,184 shares in the fourth quarter, according to a regulatory filing.
Bristol-Myers said in October it would restate more than $2 billion in revenue because it inflated sales by offering discounts to wholesalers. It faces a government investigation over its accounting for the strategy.
Shares Tumble
The company's shares tumbled 55 percent last year, the second- worst performance in the Standard & Poor's 500 Pharmaceuticals Index. Shares of Bristol-Myers have dropped 1.5 percent this year, compared with a 4.2 percent decline in the S&P drug index. On Friday, they rose 27 cents to $22.80 in New York Stock Exchange composite trading.
Bristol-Myers in December failed to raise its dividend for the first time in 30 years. Investors said they were heartened that the New York-based company didn't opt for a cut. They also expressed optimism about Abilify, a schizophrenia drug that won U.S. approval in November.
Dolan, 47, became Bristol-Myers's CEO in May 2001. That year, he agreed to pay $2 billion for part of ImClone Systems Inc. and access to the biotechnology company's experimental Erbitux cancer drug. U.S. regulators then refused to even consider the medicine. Former ImClone CEO Samuel Waksal has since pleaded guilty to insider trading and failing to pay sales taxes.
Among 32 analyst ratings on Bristol-Myers tracked by Bloomberg, only four are the equivalent of a ``buy.'' That's compared with 18 ``holds'' and 10 ``sells.''
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