Bristol-Myers profit beats expectations
NEW YORK (Reuters) - Bristol-Myers Squibb Co's (BMY.N) first-quarter results beat expectations, bolstered by the weaker dollar and demand for its drugs to treat cancer, rheumatoid arthritis and hepatitis B.
The company said on Thursday it earned $1.37 billion, or 57 cents per share. That compared with $1.1 billion, or 43 cents per share, in the year-earlier period.
Excluding special items, Bristol-Myers earned 58 cents per share. Analysts on average had expected 53 cents, according to Thomson Reuters I/B/E/S.
Revenue rose 4 percent to $5.01 billion, topping a Wall Street forecast of $4.95 billion.
Bristol-Myers, whose first-quarter results were also helped by lower taxes, reaffirmed it expects earnings this year, excluding special items, of $2.10 per share to $2.20 per share -- little changed from 2010.
"It was a good quarter, surpassing earnings expectations by 5 cents, but yet they didn't raise their 2011 forecast," said Standard and Poor's analyst Herman Saftlas. "That suggests Bristol-Myers is cautious about the rest of the year."
Sales of the company's biggest product, blood-clot preventer Plavix, rose 6 percent to $1.76 billion. Demand for the pill, sold in partnership with Sanofi-Aventis (SASY.PA), is expected to plunge a year from now, when cheaper generics become available in the United States.
Bristol-Myers is counting on new medicines and its pipeline of promising experimental drugs to cushion that blow.
"The question is how successful these new products will be in offsetting the Plavix patent cliff," Saftlas said. "That's a big mountain to climb."
Saftlas, who has a "hold" rating on company shares, said it is too early to know how well the newer products will cushion Bristol-Myers. But in the meantime, he said investors can take comfort in the company's generous dividend and strong management.
Michael Liss, senior portfolio manager of American Century Value Fund, said Bristol-Myers' stock does not reflect the company's value as a potential acquisition for larger drugmakers.
"Bristol stands out as a best takeover candidate because they have so many good drugs coming out," said Liss, who estimated its shares could be worth up to $36 to an acquirer.
Shares were down 2 cents to $28.26 in afternoon trading on the New York Stock Exchange.
U.S. regulators in March approved Yervoy (ipilimumab), which prolonged lives of patients with melanoma in clinical trials and is expected to garner blockbuster sales.
The company's experimental blood thinner Eliquis (apixaban) and the drug Nulojix (belatacept) to prevent rejection of transplanted kidneys have won backing from European drug regulators.
Sales of Orencia, used to treat rheumatoid arthritis, rose 18 percent to $199 million, while sales of leukemia treatment Sprycel jumped 31 percent to $172 million. Sales of Baraclude, for hepatitis B, grew 27 percent to $275 million.
But some older drugs held down results, including blood pressure treatment Avapro, whose sales fell 8 percent to $290 million, and colon cancer drug Erbitux, whose sales slipped 1 percent to $165 million.
Sales of schizophrenia treatment Abilify, once one of Bristol-Myers' fastest-growing products, rose just 1 percent to $624 million. The company now keeps a lower percentage of Abilify sales under a restructured agreement with its longtime partner Otsuka Pharmaceutical Co.
"It was a solid, if somewhat uninspiring, quarter," said John Rosebrough, a portfolio manager for the Archer Funds who added that company shares are trading below their fair value.
(Reporting by Ransdell Pierson; Editing by Gerald E. McCormick and John Wallace)
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