NEW YORK – Bristol-Myers Squibb Co. (BMY ) on Thursday said quarterly profit jumped 89 percent from a year ago, as the drugmaker was helped by tax benefits and took a smaller charge for an accounting scandal than in the year-ago quarter.
The company reported second-quarter profit from continuing operations of $991 million, or 50 cents per share, compared with $523 million, or 27 cents, in the year-ago quarter.
Overall results were better than the 36-cents-per share average forecast by analysts polled by Reuters Estimates, helped largely by $294 million in tax benefits that enabled the company to pay no taxes.
Company revenue, although little changed, was about $100 million better than Wall Street expected. Sales of important new drugs, such as blood clot medicine Plavix (search ), grew sharply in the quarter, offset by plunging sales of older medicines that now face generic competition.
"Results were definitely better than expected, in large part because of the company's favorable tax rate, but the company's worsening earnings picture has not really changed," said Deutsche Bank (search ) analyst Barbara Ryan.
She was referring to Bristol-Myers' expectations of declining profit this year and in 2006 due to competition from generic drugs, including cheaper U.S. copycats expected by next April for its Pravachol cholesterol fighter.
Shares of Bristol-Myers rose 1 percent amid a slight upswing for the drug sector.
The second-quarter tax benefits came from the resolution of tax contingencies and an adjustment of taxes on overseas profits the company plans to repatriate this year.
The New York-based company took $269 million in new charges during the quarter to boost legal reserves, mostly to deal with a scandal in which the company improperly inflated earnings in past years by manipulating inventories. It took $455 million in legal charges in the 2004 quarter.
The new scandal-related charges, however, were offset by income from insurance recoveries.
Excluding special items, company earnings from continuing operations rose 3 percent to 47 cents per share, versus Wall Street forecasts of 36 cents.
Company revenue from continuing operations edged up 1 percent to $4.9 billion. But revenue would have fallen 1 percent if not for the weak dollar, which increases the value of overseas sales when converted back into U.S. currency.
2005 Earnings Seen at 'Upper End' of Range
Bristol-Myers reaffirmed its expectations for 2005 earnings of $1.35 to $1.45 per share, excluding special items, but said for the first time that profit should be at the "upper end" of that range. The forecast reflects an earnings decline of at least 14 percent from 2004.
Sales of the company's top-selling drug, Plavix, jumped 26 percent to $968 million. Revenue from hypertension treatment Avapro (search ) rose 11 percent to $258 million.
Bristol's Abilify (search) schizophrenia drug, which does not cause weight gains seen with rival medicines, almost doubled sales to $240 million. The recently launched HIV treatment Reyataz (search ) more than doubled to $183 million, helped by its convenient once-daily dosing.
But sales of Pravachol (search ) fell 5 percent to $625 million, hurt by generic competition in overseas markets. Sales of cancer drugs Taxol and Paraplatin also fell sharply due patent expirations that have opened the floodgates to cheaper generics.
Bristol-Myers shares were up 23 cents to $25.33 in late-morning trade on the New York Stock Exchange.