April 21, 2009 / 10:51 AM / 10 years ago

UPDATE 2-Schering-Plough profit beats views; cost cuts help

* Q1 EPS ex-items 56 cts vs. Wall St view 47 cts

* Revenue slips 6 pct; strong dollar takes toll

* Cholesterol drugs continue to lose ground (Adds details on cost cutting, product sales)

NEW YORK, April 21 (Reuters) - Schering-Plough Corp SGP.N, which Merck & Co (MRK.N) is in the process of acquiring, reported higher-than expected first-quarter earnings on Tuesday as the drugmaker aggressively cut costs.

Profit almost tripled to $767 million, or 46 cents per share, from $276 million, or 17 cents per share, a year earlier, when the company booked charges from its purchase of Organon BioSciences.

Excluding special items, Schering-Plough earned 56 cents per share. Analysts on average expected 47 cents, according to Reuters Estimates.

Schering-Plough bolstered results by whacking its spending on selling general and administrative expenses by 11 percent to $1.5 billion, and cutting research and development costs by 9 percent to $804 million.

Quarterly revenue, 70 percent of which comes from overseas, fell 6 percent to $4.39 billion.

The company said the strong dollar, which diminishes the value of overseas sales, hurt revenue by 10 percentage points.

Combined revenue of Zetia and Vytorin, cholesterol drugs Schering-Plough sells in partnership with Merck, fell 21 percent to $973 million, continuing to suffer from clinical trial data that questioned their safety and effectiveness.

Schering-Plough does not record sales from the cholesterol joint venture. But including its 50 percent share of sales from the partnership, its global revenue fell 8 percent to $4.86 billion in the quarter.

Sales of prescription drugs fell 5 percent to $3.4 billion.

The company said its planned merger with Merck remained on track. (Reporting by Ransdell Pierson; Editing by Lisa Von Ahn)

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