FOCUS-Bristol-Myers profits fall but meet forecasts
Wednesday January 20, 8:34 pm Eastern Time
(Adds analyst comments, updates share price)
By Ransdell Pierson
NEW YORK, Jan 20 (Reuters) - Bristol-Myers Squibb Co. (NYSE:BMY - news) said on Wednesday that earnings tumbled 48 percent in the fourth quarter, hurt by one-time charges, but strong sales of key prescription drugs helped it meet forecasts on Wall Street.
The nation's No. 3 drug maker said net profits fell to $413 million, or 41 cents a diluted share, in the quarter, from $802 million, or 78 cents a share, a year earlier. The latest quarter includes a
previously announced $800 million pretax charge for breast implant liability claims and prescription drug pricing litigation.
The company said the special charge was partially offset by $100 million in insurance proceeds.
Excluding the charge, profits were $908 million, or 90 cents a share, in the latest quarter, a 13 percent jump from a year earlier on strong sales of its anti-cholesterol drug Pravachol and Taxol cancer-fighting drug, the company said.
That matched average forecasts on Wall Street, according to First Call, which tracks analysts' estimates, and Bristol-Myers stock rose $2.31 to $124.31 in consolidated New York Stock Exchange trading at 1425 EST/1925 GMT.
''It was an OK quarter for Bristol-Myers, not great and not terrible -- pretty much in line with expectations,'' said A.G. Edwards drug analyst Kenneth Nover.
Sales grew 10 percent to $4.9 billion but would have risen another 2 points were it not for the strong dollar, which eroded the value of sales overseas.
The company said domestic drug sales rose 22 percent in the quarter. Global sales of its flagship drug, Pravachol, rose 10 percent to $447 million while sales of Taxol jumped 36 percent to $347 million.
Also providing cheer was diabetes drug Glucophage, whose sales surged 56 percent to $221 million, AIDS drug Zerit, rising 33 percent to $161 million, and anti-anxiety drug BuSpar, which climbed 25 percent to $163 million.
But sales of hypertension drug Capoten/Captopril slumped 15 percent to $157 million and newer drug Monopril fell 3 percent to $93 million.
Fourth-quarter consumer product sales were weak, industry analysts said, with Excedrin and Bufferin painkiller sales down to $370 million from $406 million.
Nutritional products, including Enfamil baby formula and Boost supplements, saw sales fall 2 percent to $446 million.
Sales of beauty products, led by the Clairol hair-care line, jumped 26 percent to $571 million.
''With this exceptionally balanced array of health and personal care products, we find ourselves increasingly able to weather economic uncertainty and deliver impressive and substantial results,''
company Chief Executive Charles Heimbold said in a statement.
But analysts said Bristol-Myers' fourth quarter per-share earnings growth, excluding the special charge, trailed the average 20 percent rate expected for its U.S. peers.
Moreover, Nover said the company's drug portfolio would likely assure it earnings growth of just 13 percent in 1999 and 12 percent in 2000, compared with average 16 percent growth he sees during the same period for other large U.S. drugmakers.
Meanwhile, he said the company is bracing for possible loss of U.S. marketing exclusivity in the year 2000 for three of its best-selling drugs, Glucophage, BuSpar and Taxol.
Nover said Bristol-Myers has indicated it will fight in the courts to stave off generic competition for the drugs, while attempting to come up with improved versions of the products.
''The question is whether they can hold off the generics and whether their own new versions of the drugs will be on the market before the generics,'' Nover said.
Hambrecht & Quist drug analyst Alex Zisson said Glucophage was the ''big wild card'' in 1999 for Bristol-Myers.
He said the company was testing an extended-release form of the diabetes drug in Phase III clinical trials which might allow once-daily dosing instead of the current twice-daily regimen.
|
