Earnings: Kraft | Merck & Co. | Schering-Plough | American Express

Kraft Profit Rises

CHICAGO (Reuters) - Kraft Foods Inc. (KFT) Monday posted higher quarterly profit as lower restructuring costs and increased sales helped offset higher energy, sugar and other prices.

Kraft is in the midst of an overhaul that has included plant closings and job cuts, selling some business and buying others, and the recent replacement of Chief Executive Roger Deromedi with PepsiCo Inc.'s (PEP) Irene Rosenfeld.

The maker of Oreo cookies, Maxwell House coffee and a host of other products posted profit of $682 million, or 41 cents a share, compared with $472 million, or 28 cents a share, a year earlier.

Merck Profit Doubles

WHITEHOUSE STATION, N.J. - (AP) - Merck & Co. (MRK) said Monday its profit more than doubled in the second quarter, mainly due to sharply higher income from its partnerships to sell cholesterol drugs and other medicines and a large tax charge that depressed results a year ago.

The maker of osteoporosis treatment Fosamax and Singulair for asthma and allergies reported net income of $1.5 billion, or 69 cents per share, for the three months ended June 30, up from $720.6 million, or 33 cents per share, in the second quarter of 2005.

The profit a year ago was depressed by a net tax charge of $640 million primarily related to the repatriation of foreign earnings.

Revenue totaled $5.77 billion, up 5.6 percent from $5.47 billion a year ago.

Analysts surveyed by Thomson Financial had expected earnings per share of 65 cents on sales of $5.46 billion.

Its shares rose 60 cents, or 1.6 percent, to $37.96 in premarket trading.

For the first six months of the year, Merck reported net income of $3.02 billion, or $1.38 per share, up 44 percent from $2.09 billion, or 95 cents per share, in the year-ago period. Revenues totaled $11.2 billion, up 3 percent from $10.83 billion a year earlier.

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Schering-Plough Beats Views

NEW YORK (Reuters) - Schering-Plough Corp. (SGP) Monday reported quarterly earnings far higher than Wall Street expected on demand for its drugs against cholesterol, arthritis, allergies and hepatitis C, lifting shares by almost 4 percent.

The company earned $237 million, or 16 cents per share. That compared with a loss of $70 million, or 5 cents per share, in the 2005 period — when the Kenilworth, New Jersey-based drugmaker took charges for legal reserves for government probes.

Excluding special items, the drugmaker earned 25 cents per share. Analysts, on average, expected 17 cents per share, according to Reuters Estimates.

Global sales, which officially do not include cholesterol drugs Zetia and Vytorin co-marketed under a joint venture with Merck & Co. , rose 11 percent to $2.8 billion. That handily topped analyst sales forecasts of $2.63 billion.

Including its 50 percent share of revenue from the cholesterol treatments, Schering-Plough sales jumped 18 percent to $3.3 billion. Sales of the treatments were helped by stepped up purchases among wholesalers.

Schering-Plough Chief Executive Officer Fred Hassan said sales of Vytorin — which can lower "bad" LDL cholesterol by more than 60 percent — are surging as government guidelines increasingly aim for lower LDL levels in order to prevent heart attacks and strokes.

"Vytorin is helping to get LDL lower than Crestor and Lipitor," Hassan told analysts in a conference call, referrring, respectively, to potent rival cholesterol drugs sold by AstraZeneca Plc (AZN) and Pfizer Inc. (PFE).

Sales of Remicade, a treatment for arthritis and Crohn's disease which Schering-Plough sells outside the United States, rose 31 percent to $307 million.

The company's inhaled allergy drug Nasonex saw sales rise 21 percent to $242 million — putting it on track to become a blockbuster drug after an enhanced marketing push by Hassan.

Revenue from Peg-Intron, an injectable drug for patients infected with the liver-damaging hepatitis C virus, rose 25 percent to $226 million. Its growth was driven by widening use in Japan, although the company cautioned the sales in the second half of the year will subside as new patient enrollment there moderates.

Schering-Plough officials said they expect combined sales of Zetia and Vytorin to continue growing in the second half of 2006, despite competition from cheaper generic forms of Merck's older Zocor treatment.

Generic Zocor became available after Zocor's U.S. patent lapsed late last month. Many insurers have aggressively tried to switch patients to generic Zocor — including Merck's own authorized generic form of Zocor that is cheaper than its branded form of the medicine.

"The driver of (earnings growth) for Schering-Plough will be sales of Vytorin and Zetia and hence, the primary risk of the shares is a flattening out or decline in Vytorin prescriptions following the launch of generic Zocor," Deutsche Bank analyst Barbara Ryan said on Monday.

Schering-Plough stock rose to $20.20 on the Inet electronic brokerage system, up from a Friday close of $19.45 on the New York Stock Exchange.

Its shares have fallen 3.1 percent so far this year, compared with a gain of 4.5 percent for the American Stock Exchange Pharmaceutical Index of large U.S. and European drugmakers.

Merck shares, meanwhile, were up 2.8 percent in pre-market trading, lifted by its own better-than expected quarterly earnings.

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American Express Earning Dip On Spin-off

NEW YORK (Reuters) - American Express Co. (AXP), the credit card and travel services company, Monday said its quarterly net profit fell 7 percent, reflecting the spin-off of its Ameriprise Financial Inc. unit, but earnings from continuing operations rose more than expected.

The company, the fourth-largest U.S. card issuer, said profit from continuing operations increased 13 percent to $972 million, or 78 cents per share, from $860 million, or 69 cents per share, last year. Revenue increased 14 percent to $6.88 billion.

Analysts polled by Reuters Estimates on average forecast profit of 74 cents per share, excluding items, on revenue of $6.65 billion.

Net income for the New York-based company fell to $945 million, or 76 cents per share, from $1.01 billion, or 81 cents per share, a year earlier.

The second quarter included a $27 million loss mainly from the sale of the company's Brazil banking operations, while the year-earlier figure includes $153 million of income largely from the Ameriprise brokerage.

Chief Executive Kenneth Chenault in a statement said results benefited from record spending on cards, with growth among consumers, small businesses and corporations.

American Express added 1.9 million cardholders in the quarter, driving its total to 74.4 million, up 11 percent from a year earlier. About three-fifths of cardholders are in the United States.

Shares of American Express, a Dow Jones Industrial average component, fell 11 cents to $50.51 in afternoon trading on the New York Stock Exchange after the release of the results.

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