BMY shares are off slightly on today’s report of a ho-hum quarter. The company’s EPS guidance for 2013 (first year after Plavix goes generic) remains unchanged (see #msg-47502391 for details).
NEW YORK, Oct 26 (Reuters) - Bristol-Myers Squibb Co posted higher-than-expected quarterly earnings on Tuesday but reported revenue that disappointed because of weak sales of schizophrenia treatment Abilify and the impact of U.S. healthcare reform.
Most U.S. rivals, including Eli Lilly and Johnson & Johnson, also beat profit forecasts in the quarter due to cost cuts and other factors but came up short on the revenue line.
Bristol-Myers (BMY) said third-quarter earnings from continuing operations rose 6.4 percent to $949 million, or 55 cents per share, from $892 million, or 45 cents per share, a year-earlier quarter. Excluding special items, the New York drugmaker earned 59 cents per share. Analysts on average had expected 53 cents per share, according to Thomson Reuters I/B/E/S.
"Basically, the quarter was largely in line with expectations, although overall revenues and Abilify sales were a little light," said Deutsche Bank analyst Barbara Ryan.
Ryan said lower taxes represented half the profit beat, while strong expense management was the other big contributor.
Global sales were little changed, at $4.80 billion. Analysts were expecting $4.92 billion.
Abilify, which has been the company's big growth driver in recent years, stumbled in the quarter. Its sales fell 7 percent to $608 million, coming in $31 million below forecasts.
U.S. healthcare reforms -- including higher price rebates drugmakers must extend to the government's Medicaid insurance program for the poor -- hurt Abilify revenue. Moreover, Bristol-Myers now keeps a lower percentage of Abilify sales under a recently restructured agreement with its partner Otsuka Pharmaceutical Co.
Bristol-Myers, which loses patent protection late next year on its $6 billion-a-year Plavix blood clot preventer[Plavix is a $9B drug, but SNY books the other $3B], said other promising drugs are moving steadily toward market approval and could help cushion the blow of cheaper Plavix generics.
The company said it has begun the process of seeking marketing approval for Apixaban, a newer blood clot preventer that many analysts expect to become a big blockbuster. It hopes to complete the application by early 2011.
The drugmaker, which is hoping for approval by year's end for a melanoma treatment called ipilimumab, also disclosed it will seek U.S. approval by late 2010, or early 2011, for diabetes treatment dapagliflozin[#msg-54833040].
"We continue to have good clinical data that allow us to look at the future with optimism," Bristol-Myers Chief Executive Lamberto Andreotti told analysts in a conference call.
Bristol-Myers, whose shares fell 1.5 percent to $26.76 in afternoon trading, expects full-year earnings, excluding special items, of $2.10 to $2.20 per share. That matches the company's prior forecast of profit growth between 13.5 percent to 19 percent over last year.
Bristol-Myers has posted double-digit earnings growth in recent years, eclipsing results of most rival drugmakers.
But investors are far more focused on next year because its earnings are expected to plunge after Plavix, the world's second biggest-selling medicine, goes generic.
Global sales of Plavix, which Bristol-Myers sells in partnership with Sanofi-Aventis, rose 7 percent in the third quarter to $1.66 billion, helped by price increases.
A bright spot in the quarter was Sprycel, a leukemia treatment whose sales jumped 35 percent to $144 million.
The company's effective tax rate shrank to 19.3 percent in the quarter, from 23.4 percent a year ago, boosting the company's bottom line.
Bristol-Myers is slashing expenses ahead of the expiration of Plavix patent protections. Company marketing, sales and administrative expenses fell 6 percent to $892 million in the quarter, while advertising and product promotion costs fell 10 percent to $231 million. Research costs were held flat.‹
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