Updated from 12:40 p.m. EDT

Bristol-Myers Squibb

(BMY) - Get Report

and

Eli Lilly

,

(LLY) - Get Report

the manufacturer of Prozac, reported strong earnings growth on Thursday, though shares of both pharmaceutical makers were down slightly in Thursday midday trading.

Shares of Bristol-Myers Squibb finished regular trading down 1 7/8, or 3.6%, to 50 1/2, while shares of Eli Lilly closed down 2 1/4, or 2.3%, to 96 1/2.

For the second quarter ended June 30, New York-based Bristol-Myers Squibb said that net earnings rose 15% to $1.09 billion, or 54 cents a diluted share, from $952 million, or 47 cents a share a year earlier. The consensus estimate of analysts polled by

First Call/Thomson Financial

was 54 cents.

Revenue rose 7% to $5.3 billion from $4.9 billion a year ago, with its largest division, pharmaceuticals, posting an 11% increase worldwide to $3.5 billion. Bristol-Myers Squibb also has a presence in the personal care product market, though those divisions don't make nearly as much money as pharmaceuticals do. Sales of consumer medicine, such as Bufferin and Excedrin, grew 13% to $274 million, and sales of medical devices, such as knee joint and hip replacements, increased 5% to $440 million.

Meanwhile, sales of beauty care products, namely Clairol hair products and Herbal Essences shampoo, decreased 6% to $590 million and sales of nutritional products, such as Enfamil infant formula, remained at $440 million.

Growth in pharmaceuticals was driven by an 18% increase in the U.S., while international sales fell 3%. The top drug performers were diabetes treatment Glucophage, which grew 39% to $485 million; cancer treatment Taxol, which grew 14% to $413 million; stroke treatment Plavix, which grew 73% to $222 million; anxiety treatment Buspar, which grew 47% to $194 million and hypertension treatment Avapor, which grew 42% to $91 million.

Cholesterol treatment Pravachol also staged a respectable comeback in its attempt to compete with Pfizer's Lipitor, with a sales increase of 7% to $407 million.

For the second quarter ended June 30, Eli Lilly beat the First Call/Thomson consensus estimate of 60 cents by a penny. The company's net income rose 16% to $666.2 million, or 61 cents a diluted share, from $576.4 million, or 52 cents a share, in the year-ago period.

Revenue rose 12% to $2.6 billion from $2.3 billion a year ago, despite faltering sales of antidepressant Prozac, which dropped 9% to $627.4 million. In the U.S., Prozac sales fell 4%, to $539.8 million, because of continued competitive pressures, the company said. Outside the U.S., Prozac sales were down 31%, to $87.6 million, because of competition from generic products in the U.K.

"For the year, the company continues to anticipate a slight decline in overall Prozac sales," Lilly said in a statement. The company is looking for a drug to replace Prozac, which will start to lose its U.S. patent protection in 2003.

Instead, growth was driven by schizophrenia treatment Zyprexa (up 40% to $550.7 million), osteoporosis treatment Evista (up 101% to $133.7 million), pancreatic cancer treatment Gemzar (up 25% to $107.9 million) and products for the treatment of diabetes such as Humulin, Humalog, Actos and Iletin (up 24% to $440 million).

"As the sales of our newer products achieve substantial growth rates, our overall portfolio is becoming much more diversified as evidenced by the fact that Prozac was less than one fourth of total revenues in the second quarter," said Sidney Taurel, chairman, president and chief executive of Lilly, in a statement.

The Indianapolis-based company's late-stage pipeline currently has eight drug candidates in registration-phase trials, with two more expected by the end of 2000, according to Taurel.