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Bristol-Myers Squibb


on Thursday reported fiscal 2004 fourth-quarter and full-year earnings results that dropped sharply from corresponding periods in fiscal 2003. However, revenue for both periods in 2004 was slightly higher than for the same periods in 2003.

On a GAAP basis, the company earned $139 million, or 7 cents a share, on revenue of $5.15 billion for the three months ended Dec. 31. For the same period in 2003, Bristol-Myers Squibb earned $506 million, or 26 cents a share, on revenue of $5.08 billion.

But when one-time charges are excluded, Bristol-Myers Squibb said it earned 39 cents a share from continuing operations -- six cents better than the consensus prediction among analysts polled by Thomson First Call. Fourth-quarter revenue fell below the consensus prediction of $5.49 billion.

The company noted that the fourth-quarter was affected by an agreement reached in December to sell its Oncology Therapeutics Network business. For accounting purposes, OTN is considered a discontinued operation. Although OTN had sales of $691 million in the fourth quarter and $2.5 billion for the full year, the company said OTN's earnings had "no impact" on earnings per share in 2003 and 2004.

The company also said it was taking a $575 million tax charge in the fourth quarter of 2004 relating to the company's plan this year to repatriate some $9 billion in profits from foreign subsidiaries for domestic use. Thanks to a law signed by President George W. Bush in October, companies are permitted to repatriate these foreign earnings at a one-time tax rate of 5.25% rather than the customary 35% corporate tax rate. Large, multinational drug companies have been the biggest beneficiaries of this tax holiday.

Bristol-Myers Squibb also offered an earnings prediction for 2005, saying EPS from continuing operations should be in the range of $1.35 to $1.45 excluding one-time items. The consensus among analysts is an EPS of $1.40, and analysts expect Bristol-Myers EPS for 2006 to continue falling to $1.32.

For 2005, Bristol-Myers Squibb said it expected GAAP earnings per share of $1.27 to $1.37.

The company reiterated a warning that it expects to continue suffering, as it has for recent years, from patent expirations on important products. This year, it expects to lose $1.4 billion to $1.5 billion in sales from fiscal 2004 levels for products that have lost or will lose patent protection.

The company also said its expectation for future sales growth includes "substantial expected increases" in Plavix, which prevents clotting of blood platelets and which was the company's biggest product in 2004 with $3.3 billion in sales. Bristol-Myers Squibb is a partner with



, in marketing the drug. Although the key patent expires in 2011, Plavix is facing a patent challenge which Sanofi-Aventis is defending. Bristol-Myers Squibb repeated Thursday that it believes the patent is valid, but it added that "it is not possible at this time reasonably to assess the outcome of these litigations." If the patent challenge succeeds, Bristol-Myers Squibb said generic competition "is very unlikely to occur before the second half of 2005."

For fiscal 2004 on a GAAP basis, Bristol-Myers Squibb earned $2.39 billion, or $1.21 a share, on revenue of $19.38 billion. For Fiscal 2003, the company earned $3.11 billion, or $1.59 a share, on $18.65 billion.

On a non-GAAP basis, the company's full year EPS of $1.70 beat Wall Street estimates by 6 cents.