Bristol-Myers Swings to Profit, Helped by Plavix Sales

Bristol-Myers Squibb Tuesday reported a higher-than-expected fourth-quarter profit on demand for its Abilify schizophrenia drug and Plavix blood-clot preventer, lifting shares more than 3 percent early trading.

The New York-based drugmaker said it earned $1.24 billion, or 63 cents per share. That compared with a loss of $89 million, or 5 cents per share, in the year-ago period when it took a big charge for soured investments.

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Excluding special items, Bristol-Myers earned 46 cents per share. Analysts on average expected 40 cents per share, according to Reuters Estimates.

The company forecast full-year 2009 earnings per share of $1.85 to $2.00, excluding special items. Most of that range is below the Reuters Estimates forecast of $1.96.

The forecast represents profit growth from last year of 6.3 percent to 15 percent from continuing operations.

"Overall, a strong quarter and good 2009 guidance, with no surprises," Sanford Bernstein analyst Tim Anderson said in a research note.

Bristol reaffirmed it expects compound annual earnings growth from continuing operations of at least 15 percent from 2007 through 2010.

The company's profit margin rose to 71 percent in the quarter, from 66.1 percent a year ago, due to cost cutting, price increases and less spending to improve manufacturing operations.

The good quarterly showing comes a day after rival drugmakers Pfizer and Wyeth agreed to a $68 billion merger. Bristol-Myers has long been rumored as a possible merger target for Pfizer and other large drugmakers who need new products to offset sales declines from looming patent expirations for their own big medicines.

The profit picture for Bristol-Myers could become far more challenging in November 2011, when Plavix faces generic competition in the United States.

"Bristol-Myers Squibb is likely to have the best earnings per-share growth through 2011" among the U.S. and European drugmakers Sanford Bernstein covers, Anderson said in a research note.

Moreover, Bristol's dividend carries a high yield of about 5.5 percent and the company could be acquired if it finds a way to better offset expected sales declines of Plavix once the pill loses U.S. market exclusivity, Anderson said.

The company's quarterly revenue of $5.25 billion was a bit lower than the Reuters Estimates forecast of $5.42 billion. Plavix sales rose 7 percent to $1.47 billion, while Abilify revenue jumped 31 percent to $606 million.

Several newer drugs continued to show strong growth, including hepatitis B treatment Baraclude, whose sales rose 55 percent to $153 million. But Erbitux, a treatment for colon cancer and head and neck cancer sold in partnership with Eli Lilly , slipped 2 percent to $182 million.

Bristol's shares rose 69 cents, or 3.1 percent, to $22.94 in early New York Stock Exchange trading.

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