swung to an $181 million fourth-quarter loss on $229 million in charges and an 18% slide in sales compared with last year, and reiterated that 2004 will be a "year of repair and cleanup."
The fourth-quarter loss came out to 12 cents a share and the charge 13 cents a share, leaving income of 1 cent a share before the item. Sales fell to $1.95 billion from $2.37 billion last year, when the company earned $313 million, or 21 cents a share. Analysts surveyed by Thomson First Call had been forecasting earnings of 4 cents a share on sales of $2.03 billion in the latest quarter.
The special charges in the latest fourth quarter comprised employee termination costs of about $179 million and asset writedowns of $50 million.
The shares closed at $17.52, down 27 cents, or 1.5%, on Friday. They weren't doing any appreciable volume in Monday's premarket.
Several big problems continue to afflict Schering-Plough on an operating basis, including the loss of patent exclusivity on its Claritin allergy medication and new competition for its portfolio of drugs that treat hepatitis C. Sales of Claritin fell 36% to $93 million in the fourth quarter compared with last year, while sales in the hepatitis group, Intron, fell 55% to $369 million,
The company's gross margin was 62.1% in the latest quarter compared with 74.4% a year ago, with 3.9 percentage points of the decline attributable to a $92 million litigation gain in the year-ago quarter. The rest of the decline reflected a change in product sales mix and increased spending on factory improvements sparked by government investigations of several plants.
Looking ahead, the company said: "We are making good progress in stabilizing our allergy franchises and building market share in the cholesterol-treatment market in spite of the aggressive launch of a new competitor. As planned, 2004 will be the year of repair and cleanup, bridging to an expected turnaround starting in 2005."