Major drug companies on Tuesday reported generally stronger-than-expected earnings, led by Eli Lilly, which showed continued gains in sales of the anti-depressant Prozac.
Lilly’s stock gained more than 3 percent on news of its stronger results.
Bristol-Myers Squibb profits rose 9 percent, led by sales of its cholesterol fighter Pravachol. SmithKline Beecham credited sales of new drugs for a 16 percent profit increase and American Home Products’ profit gained sharply, mostly from cost savings. Warner-Lambert’s earnings rose 16 percent.
Eli Lilly & Co:
If last year’s profits from Indianapolis-based Lilly’s medical devices unit, which has been spun off, are excluded, the company’s net income would have improved 33 percent.
The company earned $415.6 million, or 76 cents per share, during the period ended Sept. 30, compared with $1.23 billion, or $2.14 per share, during the third quarter of 1995. Of last year’s profit, $917.5 million came from the medical device unit.
Analysts had been estimating the quarterly profits would amount to 64 cents per share and the company’s stock rose as much as $2.25 before settling back to close up 50 cents at $69.25 per share Tuesday afternoon.
Sales during the quarter rose 11 percent to $1.80 billion from $1.62 billion.
Worldwide sales of the antidepressant Prozac rose 10 percent during the quarter, despite competition from generic forms of the drug in Canada and additional competition in France.
For the first nine months of the year, net income fell 41 percent to $1.15 billion, or $2.10 per share, compared with $1.95 billion, or $3.38 per share, during the year-ago period. Sales rose 6 percent to $5.29 billion.
< ^SmithKline Beecham=
SmithKline, which has headquarters in London and Philadelphia, said its Nicoderm patch and Nicorette gum helped its earnings increase to $386 million, or 71 cents for each American depositary receipt, on sales of $3.1 billion. A year ago, the company earned $334 million, or 61 cents per ADR, on sales of $2.7 billion.
“Nicoderm and Nicorette have both been successfully launched and although it’s very early … we’re very encouraged because we’ve taken an 80 percent market share in the smoking cessation market,” Dr. James Hill, senior vice president for corporate affairs, said in an interview from London.
This year’s earnings were expected to be about 70 cents per ADR, according to a survey by First Call Inc. The New York Stock Exchange-traded ADRs closed 62 1/2 cents higher to $64.12 1/2 on Tuesday.
For the first nine months of the year, profits rose to $8.9 billion, up from $7.8 billion last year. Earnings for each ADR were $2.07, up from $1.86 and sales rose to $8.9 billion from $7.8 billion.
< ^Bristol-Myers Squibb Co.=
Bristol-Myers earned $753 million, or $1.50 per share, on sales of $3.75 billion in the latest quarter. A year ago, the company earned $689 million, or $1.36 per share, on sales of $3.41 billion.
The earnings per share beat expectations of $1.48 and the company’s stock closed up $2.87 1/2 to $106.87 1/2 on the NYSE.
The company said Pravachol sales were $261 million in the quarter, up 35 percent from a year earlier. Pravachol sales were helped by results of a study, sponsored by Bristol-Myers, that showed cholesterol-lowering drugs can sharply reduce the risk of second heart attacks even for patients with average or slightly high cholesterol levels.
The company said that overall prices were mostly flat and that gains came from increased sales volume.
For the first nine months of the year, the company earned $2.13 billion, or $4.25 per share, on sales of $11.1 billion. A year earlier, the company earned $1.95 billion, or $3.86 per share, on sales of $10.16 billion.
< ^Warner-Lambert Co.=
Warner-Lambert earned $153 million, or 56 cents per share, in the quarter compared with $132 million, or 48 cents per share, a year earlier. Sales of $1.8 billion remained virtually unchanged from the third quarter of 1995.
The company’s results slightly beat First Call’s consensus estimate of 54 cents per share, but the company’s stock closed off 87 1/2 cents at $65.25 on the NYSE.
Pharmaceutical sales in the United States rose 16 percent to $290 million, but would have risen 32 percent had it not been for January’s divestiture of Warner Chilcott generic drugs. Foreign sales, hurt by poor exchange rates, increased 2 percent.
Consumer health sales fell 5 percent to $691 million, largely because the company moved its Halls cough tablets to the confectionery business.
In the first nine months of the year, the company earned $615.5 million, or $2.27 per share, on sales of $5.4 billion. A year earlier, the company earned $616.4 million, or $2.29 per share, on sales of $5.2 billion.
Madison, N.J.-based American Home earned $491.1 million, or 77 cents per share, for the third quarter compared with $276.5 million, or 45 cents per share, for the same period a year ago.
Excluding a restructuring charge recorded a year ago, third quarter 1996 income was up 25 percent, the company said.
The results matched analysts’ estimates and the company’s stock closed down 37 1/2 cents per share at $66 on Tuesday.
Sales increased 7 percent to $3.5 billion from $3.3 billion for the same period last year.
U.S. pharmaceutical sales were up 13 percent, primarily because of increased sales of Premarin, which helps minimize hot flashes and prevent osteoporosis in post-menopausal women.
The company has been implementing cost savings efforts since its 1994 purchase of American Cyanamid, helping explain the rapid profit growth despite modest sales increases.
Earnings for the first nine months decreased 12 percent to $1.4 billion, or $2.16 per share, compared with $1.6 billion, or $2.59 per share, for the first nine months of 1995. Nine-month sales increased to $10.6 billion from $10 billion in 1995.