Charges Weigh on Bristol's Forecast

Bristol-Myers Squibb ( BMY) shares dipped 5% Thursday after the drugmaker reported quarterly and annual earnings and reined in 2008 GAAP guidance for earnings per share.

The New York City-based company reported a fourth-quarter loss of $133 million, or 7 cents a share, vs. a loss of $170 million, or 9 cents a share, in the year-ago quarter.

The GAAP figures include charges of $292 million for the company's productivity transformation initiative, an in-process research charge of $230 million related to the Adnexus acquisition and an impairment charge of $275 million on investment in auction rate securities.

On an adjusted basis, the company reported earning $654 million, or 33 cents a share, vs. $344 million, or 18 cents a share, in the year-ago quarter, on sales of $5.4 billion. The company's 33% increase in sales included a 5% favorable foreign-exchange impact.

Analysts surveyed by Thomson Financial were expecting 34 cents a share on revenue of $5.24 billion.

For the year, the company reported adjusted earnings of $2.16 billion, or $1.09 a share ($1.48 a share on an adjusted basis), vs. $2 billion, or $1.01 a share, in 2006. Sales totaled $19.3 billion, a 12% increase that included a 3% favorable foreign-exchange impact. Analysts were expecting EPS of $1.47 on $19.7 billion in revenue.

Back to the quarter, worldwide pharmaceutical sales increased 39% year over year to $4.4 billion, including a 5% favorable foreign-exchange impact. U.S. sales increased 65% to $2.5 billion on increased sales of blood thinner Plavix, a partnership with Sanofi-Aventis ( SNY), which rose 177% to $1.37 billion. Sales of antipsychotic Abilify (up 28% to $462 million), HIV treatment Reyetaz (up 31% to $334 million) and the Sustiva franchise (up 17% to $260 million) also helped out.

The company said newer products that performed well included rheumatoid arthritis drug Orencia, hepatitis B treatment Baraclude, leukemia therapy Sprycel and breast cancer treatment Ixempra.

Looking ahead, Bristol revised its 2008 earnings guidance to between $1.36 and $1.46 a share, vs. previous guidance of $1.44 and $1.54 a share, to reflect the sale of its Medical Imaging business and $500 million in charges related to the productivity transformation.

On an adjusted basis, the company expects to earn between $1.60 and $1.75 a share. Bristol said it still expects non-GAAP earnings to increase at a minimum of 15% compounded annual growth rate, from the 2007 base, for the next three years. This excludes the costs related to the company's productivity transformation initiative. Analysts are looking for $1.71 a share on revenue of $21.25 billion.

Bristol shares declined 81 cents, or 3.5%, to $22.45 in recent trading Thursday morning.

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