Updated from 9:56 a.m. EDT
American Home Products
, which agreed briefly to a merger back in November before
stepped in to
snatch Warner-Lambert away, both reported first-quarter earnings on Wednesday that exceeded expectations on the strength of growth in their respective drug businesses.
Warner-Lambert reported earnings that exceeded Wall Street's expectations by 2 cents because of robust sales of blockbuster drugs Lipitor and Neurontin, while American Home beat estimates by 8 cents.
For the first quarter ended Mar. 31, Warner-Lambert, the manufacturer of Rolaids and Listerine mouthwash, said profit rose 35% to $516 million, or 58 cents a diluted share, from $382 million, or 43 cents a share, a year earlier. The consensus estimate of analysts polled by
First Call/Thomson Financial
was 56 cents.
The figures from this quarter exclude the $91 million, or 10-cent-a-share, after-tax cost for the withdrawal from the market of diabetes drug Rezulin, announced on Mar. 21. Also excluded is the payment of a $1.8 billion, or $2.09-a-share, after-tax break-up fee to American Home Products for the thwarted merger.
Including those costs, Morris Plains, N.J.-based Warner-Lambert reported a net loss of $1.4 billion, or $1.61 a share.
Revenue rose to $3.41 billion from $3.01 billion a year ago, driven by the continued growth of cholesterol-lowering agent Lipitor and anticonvulsant Neurontin. Lipitor sales increased 46% worldwide to $1.1 billion, while Neurontin sales rose 71% worldwide to $301 million.
Overall, the pharmaceutical segment -- the largest of the company's three business segments accounted for 65% of sales -- grew 19% worldwide to $2.2 billion. U.S. sales advanced 26% to $1.5 billion and international sales rose 6% to $645 million.
Worldwide sales of the consumer health care segment, which accounted for 22% of sales, increased 2% to $748 million. U.S. sales were virtually flat at $415 million, while international sales rose 4% to $333 million.
The Adams confectionery segment -- which makes Dentyne and Trident gum, as well as Halls cough tablets -- racked up a 9% increase in worldwide sales to $500 million, accounting for 15% of the quarter's revenues. Sales in the U.S. rose 5% to $162 million and international sales increased 11% to $339 million.
On Tuesday, Pfizer posted first-quarter
earnings of $1.09 billion, or 28 cents a share, 3 cents ahead of the
First Call/Thomson Financial
estimate and up from the year-ago $815 million, or 21 cents a share. Revenues came in at $4.32 billion, up 10% from last year's $3.93 billion.
Shares of Warner-Lambert were up 3 9/16 to 110 13/16 in midday trading Wednesday, after reaching a new 52-week high of 111 7/16. (Warner-Lambert closed up 7 1/8, or 7%, at 114 3/8.)
For the first quarter ended Mar. 31, American Home's net income rose to $634.9 million, or 48 cents a share, from $538.1million, or 40 cents a share, a year earlier. That matched the consensus estimate of analysts polled by First Call/Thomson Financial.
The figures from this quarter exclude the $1.8 billion break-up fee received by Warner-Lambert. Including the fee, American Home posted income of $1.75 billion, or $1.32 a share.
Worldwide revenue rose 17% to $3.34 billion from $2.86 billion a year ago, mainly on strength in the pharmaceuticals business. Pharmaceutical sales increased 16% to $2.74 billion due to higher sales of the osteoporosis drug Premarin, which grew 8% to $542 million; depression and anxiety treatment Effexor XR, which rose 54% to $252 million; and rheumatoid arthritis medication Enbreal, which more than doubled to $136 million.
The Madison, N.J.-based company's consumer health care business -- the maker of Centrum vitamins and Advil pain medication -- recorded a 6% increase in sales to $596 million.
Last month, American Home announced the
sale of its agricultural products business to Germany's
for $3.8 billion in cash and the assumption of some debt. As a result, the company recorded an estimated after-tax loss of $1.57 million, or $1.19 a share, which includes the estimated after-tax income of the business from April 1 until the business is divested.
Shares of American Home rose 1 15/16, or 3%, to 58 5/16 in midday trading Wednesday. (American Home closed up 2 3/4, or 5%, at 59 1/8.)
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