Updated from 8:45 a.m. EST
said Monday that it lost $1.76 billion, or $1.32 a share, during the fourth quarter, primarily because of a $4.5 billion charge related to litigation involving the diet drug cocktail fen-phen.
The charge amounts to an after-tax expense of $2.63 billion, or $1.97 a share, and it brings the amount of historical fen-phen-related charges to $21 billion, of which $13.9 billion has been paid through Dec. 31.
The news sent the stock plunging in premarket trading, dropping $2.45, or 5.7%, to $40.53.
For the same period in 2003, the company earned $335.3 million, or 25 cents a share, including one-time charges.
The company said that excluding one-time charges, it earned $860.7 million, or 64 cents a share, for the fourth quarter of 2004 compared to a profit of $801.7 million, or 60 cents a share, for the fourth quarter of 2003.
These financial results excluding one-time charges fell below the consensus of analysts polled by Thomson First Call, who had predicted a fourth-quarter profit of $900 million, or 67 cents a share.
Fourth-quarter revenue for 2004 was $4.64 billion, up from $4.33 billion for the same period in 2003. Wyeth's fourth-quarter revenue was slightly below the Thomson First Call estimate of $4.66 billion.
The company also predicted that 2005 earnings per share would be in the range of $2.70 to $2.80, below the average analyst estimate of $2.89 a share.
The company said its 2005 EPS prediction excludes any impact of a possible tax holiday based on a law that allows companies to repatriate earnings on their foreign subsidiaries at a tax rate of 5.25% rather than the traditional corporate tax rate. Many drug companies have taken advantage of this law signed by President Bush in October. Wyeth officials said Monday they are still evaluating their options.
Wyeth said the expanded reserves for the fen-phen litigation "represents management's best estimate of the aggregate amount required to cover diet drug litigation costs." These costs include payments to a national class-action settlement signed in 1999 as well as payments to plaintiffs who decided to pursue individual actions against the company. In recent weeks, Wyeth reported some promising -- but still tentative -- developments that
would provide greater clarity on its diet drug litigation expenses.
"We made significant progress in the matter of diet drug litigation," said Robert Essner, chairman and CEO. "We expect that 2005 will be a year of continued growth in earnings and net revenue and continued investment in our business to make our future even brighter."