Updated from 7:29 a.m. ESTEli Lilly's ( LLY) sales for the fourth quarter rose 9%, but earnings dropped sharply year over year because of significant charges the drugmaker had to record. Worldwide revenue was $4.25 billion for the quarter, up from $3.88 billion in the year-earlier period. Earnings sank to $132.3 million, or 12 cents a share, from $700.6 million, or 64 cents a share, in the 2005 fourth quarter. Lilly took a charge of $495 million, or 42 cents a share, to settle legal claims involving the schizophrenia drug Zyprexa. It also took a charge of $450 million, or 31 cents a share, for asset impairments that included closing several facilities and halting work on an insulin-manufacturing plant. However, excluding items, Lilly's adjusted profits for the fourth quarter rose 7% to $929.6 million. Lilly would have earned 85 cents a share before items, 3 cents ahead of estimates. Analysts had expected sales of $4.08 billion. For the full year, Lilly's earnings per share of $3.18, excluding items, beat the Wall Street consensus by 3 cents. Last year's results provide "a solid footing for 2007," said John Lechleiter, Lilly's chief operating officer, during a telephone conference with analysts. By midmorning, Lilly's stock was up 52 cents, or 1%, to $53.28. Looking forward, Lilly projects adjusted earnings of 77 cents to 79 cents a share for the first quarter. For 2007, Lilly forecasts a profit of $3.25 to $3.35 a share before items.