Pharmaceutical Giants Beat Estimates

Bristol-Myers Squibb, Johnson & Johnson and Pfizer all beat Wall Street expecations, although Pfizer's results were skewed by extraordinary items.
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Johnson & Johnson

(JNJ) - Get Report

,

Bristol-Myers Squibb

(BMY) - Get Report

and

Pfizer

(PFE) - Get Report

reported third-quarter earnings today that beat Wall Street's expectations, although Pfizer's results were skewed by large extraordinary items in both 1999 and 1998 quarters.

Shares of all three pharmaceutical companies surged.

Citing steady sales of its anti-impotence drug Viagra, Pfizer said its operating income for the latest quarter rose to $906 million, or 23 cents a share, from $667 million, or 17 cents a share, from last year's third quarter. A consensus of analysts polled by

First Call/Thomson Financial

had expected Pfizer to report earnings of 21 cents a share.

But net income fell 50% to $701 million, or 18 cents a diluted share, from $1.4 billion, or 36 cents a share, in the 1998 comparable quarter. Pfizer, based in New York City, attributed the decrease to a one-time $310 million charge this year for inventories for the antibiotic Trovan and a one-time gain in last year's third quarter from the sale of two medical device units for $2.2 billion.

Pfizer said third-quarter revenues increased by 20% to $3.9 billion from $3.3 billion a year earlier.

Pfizer's stock was up 1 13/16 to 39 3/8 at midday.

David L. Shedlard, Pfizer's executive vice president and chief financial officer, said the company should hit its expectations for the year. Shedlard said in a statement: "We look forward to a strong fourth quarter."

Johnson & Johnson said its net income rose 14.5% to $1.1 billion, or 80 cents a diluted share, from $961 million, or 70 cents a diluted share, in the 1998 third quarter. A consensus of analysts polled by First Call called for the pharmaceutical giant to post earnings of 78 cents a share.

Sales increased 17.9% to $6.7 billion from $5.7 billion in the comparable quarter in 1998.

Johnson & Johnson's stock jumped 5 1/8 to 99 5/8 by midday.

The New Brunswick, N.J.-based company cited a 35% increase in domestic sales for the strong quarterly results. Particular drugs spurring the company's sales growth were Procrit/Eprex, which treats anemia, Risperdal, an antipsychotic medication, Duragesic, a transdermal patch for chronic pain, Levaquin, an anti-infective, and Ultram, which is an analgesic.

Earlier this month, Johnson & Johnson also bought Centocor, an anti-body technology, for $4.9 billion.

"Centocor will enhance existing Johnson & Johnson growth platforms in biotechnology, cardiology, circulatory diseases and gastrointestinals," Ralph S. Larsen, chairman and chief executive, said in a release.

Bristol-Myers said its net income rose 14% to $1.1 billion, or 54 cents a diluted share, in the third quarter, from $966 million, or 47 cents a share, for the comparable quarter in 1998.

Sales for the third quarter rose 11% to $5 billion from $4.5 billion in the 1998 quarter.

The company's stock surged 4 3/8 to 75 7/8 by midday.

Like Johnson and Johnson, Bristol-Myers experienced strong growth in U.S. sales. The company also completed an agreement for aripiprazole, a new drug for schizophrenia still being studied.

"We continued to invest heavily in research and development for the future in order to ensure a robust pipeline of innovative medicines to help people everywhere," Charles A. Heimbold Jr., the New York City-based company's chairman and chief executive, said in a statement.