Wyeth Earnings Jump 44% on Gain

Updated from 8:22 a.m. EDT

WyethWYE easily beat the Street when it came to earnings Wednesday. But the Street -- gently -- beat back the company's stock.

Shares of the Madison, N.J.-based drug giant lost 28 cents, or 0.6%, to close at $47.95. But earlier in the day, the stock fell as low as $46.02.

The stock's decline was in contrast to the company's second-quarter earnings of 65 cents a share, well above the 49 cents predicted by the Thomson First Call consensus of 26 analysts. Second-quarter earnings rose 44% from 45 cents a share in the same period last year.

"I think a lot of questions remain over the rest of 2003 and for 2004," said Robert C. Hazlett, a drug industry analyst for SunTrust Robinson Humphrey. He rates the stock as underweight. He doesn't own shares and his firm doesn't have an investment banking relationship with Wyeth.

Analyst Girish Tyagi, of Thomas Weisel Partners, noted that despite the big second-quarter advance, Wyeth didn't raise its earnings guidance for the full year. "Management has some caution for the second half of the year," said Tyagi, who has a peer perform rating on Wyeth. He doesn't own the stock; his company doesn't have an investment banking relationship with Wyeth.

The company's CFO, Kenneth Martin, reaffirmed Wyeth's year-end earnings guidance at $2.40 a share to $2.50 a share.

Wyeth's second quarter was aided by a catch-all category called "other net income," which at $270.3 million was nearly six times greater than the $48.7 in other net income from the same period last year. The big change was due to a gain on selling U.S. and global products rights to some prescription and nonprescription products.

Total net income increased 44% to $864.4 million from $599.9 million for the same period last year. Total revenue advanced 7% to $3.75 billion from $3.50 billion.