Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Biotech / Medical : Pharma News Only (pfe,mrk,wla, sgp, ahp, bmy, lly) -- Ignore unavailable to you. Want to Upgrade?

To: Anthony Wong who wrote (884)	10/9/1998 10:53:00 AM
From: Anthony Wong	Read Replies (3) \| Respond to of 1722

10/09 08:33 US drug group seen boasting double-digit Q3 growth By Ransdell Pierson NEW YORK, Oct 9 (Reuters) - The largest U.S. drug companies are expected to boast double digit per-share earnings growth in the third quarter, helped by growing U.S. sales of newer prescription drugs and the sector's minimal exposure to financially turbulent emerging markets. "The third quarter could prove to be the strongest earnings quarter for the drug group in this already-strong year," said Kenneth Nover, a pharmaceuticals analyst for the St. Louis-based brokerage A.G. Edwards & Sons. Nover said he believed the per-share earnings growth of the biggest U.S. drugmakers would average about 20 percent to 21 percent from the same quarter in 1997. "What we're seeing is continued strong growth in a sector which is hugely outperforming other groups," Nover said, adding that earnings growth of U.S. blue-chip drug companies rose an impressive 15 percent on average in the first quarter and 20 percent in the second quarter. First Call research associate Ken Perkins, whose firm collates corporate earnings forecasts of analysts, said "Big Pharma" companies were expected to show average year-on-year earnings growth of 19.3 percent in the third quarter. By contrast, he said third quarter earnings of companies in the broad-based Standard & Poor's 500 Index were expected to slip 2.4 percent -- the first negative quarter for the index since 1991, when the United States was in a recession. Perkins said earnings for the U.S. drug group had proven fairly immune to the global economic turmoil that in recent months has played havoc with the broad market, particularly with financial companies and investment banks heavily exposed to ailing Asian and East European economies. "The (U.S.) drug industry has relatively low exposure to foreign markets, so the impact on its earnings is not generally great. And people always need drugs -- they're not going to cut back on them in a souring economy," Perkins added. ABN-AMRO analyst James Keeney predicted Warner-Lambert Co. <WLA.N> would again lead the pack, with third quarter EPS growth of 42 percent, to 34 cents per diluted share, spurred by its blockbuster anti-cholesterol drug Lipitor and type II diabetes treatment Rezulin. Keeney said Warner-Lambert's performance should be "pretty consistent" with the New Jersey drug company's 43 percent earnings growth in the second quarter and 37 percent advance in the first quarter, also attributed to strong sales of the two drugs launched in early 1997. Pfizer Inc. <PFE.N> will likely weigh in with earnings growth of 22 percent, to 56 cents per share, Keeney predicted. He said the performance would be a sequential decline, however, from Pfizer's sizzling 34 percent growth in the second quarter -- reflecting slowing sales of its anti-impotence pill Viagra, which shattered sales records for a newly launched drug after hitting drugstores in April. Swedish-U.S. drugmaker Pharmacia & Upjohn <PHU.ST> <PNU.N> will likely deliver on its earlier promise of a solid earnings turnaround in the second half of 1998, delivering third-quarter growth "in the high teens," said Hambrecht & Quist drug analyst Alex Zisson. Zisson said P&U, which moved its headquarters to Bridgewater, N.J., earlier this year, will benefit from its recently launched drug for overactive bladder, Detrol, and good demand for its glaucoma drug Xalatan. "Detrol looks like it will do $100 million in sales during its first full year, which means it could be on track to eventually do $500 million or $600 million in annual sales," Zisson said. Drug giant Merck & Co. Inc. <MRK.N> is expected to post third quarter growth of about 14 percent, to $1.11 per diluted share, according to the consensus forecast of analysts polled by First Call. Merck's shares were pounded in July after the company reported that second quarter diluted per-share earnings had risen 15 percent to $1.07, one cent shy of Wall Street expectations. "Merck came up short in the second quarter. But it's one of the best managed companies and is unlikely to disappoint two quarters in a row," said Mehta Partners drug analyst Sergio Traversa. Keeney predicted American Home Products Corp. <AHP.N> would trail behind its peers with operating earnings growth of about 10 percent in the third quarter, crimped by the loss of diet drugs Redux and Pondimin, which it recalled from the market in September 1997. The First Call consensus analysts' forecast for American Home is 46 cents. That compares with 42 cents for the same quarter of 1997, which excludes a one-time after-tax special charge for the recall. American Home is expected to consummate a planned merger with Monsanto Co. <MTC.N> later this year. Eli Lilly and Co. <LLY.N> is expected to report third quarter earnings of 51 cents, a year-over-year increase of 27 percent, according to First Call. Analysts predicted growth would be fueled by the Indianapolis drugmaker's antidepressant Prozac and schizophrenia drug Zyprexa. Company Q3 1998 Est Q3 1997 Actual American Home Products $0.46 $0.42 Bristol-Myers Squibb <BMY.N>.N$0.95 $0.84 Johnson & Johnson <JNJ.N> $0.70 $0.63 Eli Lilly and Co $0.51 $0.40 Merck & Co $1.11 $0.97 Pfizer Inc $0.56 $0.46 Pharmacia & Upjohn $0.41 $0.35 Schering-Plough Corp <SGP.N> $0.57 $0.48 Warner-Lambert Co $0.34 $0.24 Excludes after-tax special charge of 9 cents per share