Wyeth Forecasts Earnings Growth of 10%
{{#rendered}} {{/rendered}}Drugmaker Wyeth (WYE) on Monday forecast 2006 earnings would grow 10 percent over 2005 levels but said it sees higher expenses related to litigation involving its withdrawn diet drug.
The company also said it expects 2005 profit will slightly exceed the upper end of its previous forecast and shares rose nearly 1 percent in after-hours trading.
Wyeth said it sees 2006 earnings of $2.97 to $3.07 per share — a forecast that excludes potential restructuring charges but includes the impact of accounting for stock options.
{{#rendered}} {{/rendered}}Analysts on average estimate Wyeth will earn $3.14 per share in 2006, excluding items, according to Reuters Estimates. But analysts said those estimates do not include the impact of stock options, which the company said would likely be 12 cents to 15 cents per share.
"If you adjust (Wall Street) consensus for option expensing, they are right where everybody thought they would be," Deutsche Bank analyst Barbara Ryan said of the outlook.
Al Rauch, an analyst for A.G. Edwards, called the 2006 forecast positive.
{{#rendered}} {{/rendered}}"A lot of U.S. pharmaceutical companies are estimating low to mid single-digit EPS growth and Wyeth is looking to deliver double-digit growth," Rauch said.
Wyeth said it expects international revenue growth for the arthritis drug Enbrel to be in excess of 30 percent in 2006. Wyeth has exclusive sales rights to Amgen Inc.'s (AMGN) Enbrel outside of North America with international sales in 2005 exceeding $1 billion.
The company sees revenue growth of its Prevnar vaccine to prevent certain childhood infections in excess of 25 percent.
{{#rendered}} {{/rendered}}Wyeth said it was looking to regain growth of its depression drug Effexor, with international growth expected to be more "dynamic" than in the U.S. market.
U.S. Effexor growth has fallen off with recent requirements of strong warnings on the labels of antidepressants that they can raise the risk of suicidal thoughts among young patients.
The Madison, New Jersey-based company said it now expects 2005 earnings to "slightly exceed" the $2.90 per share that was the high end of its forecast of $2.80 to $2.90, excluding the impact of stock option expense and other items.
{{#rendered}} {{/rendered}}Wall Street is looking for $2.94 per share for the year just concluded, according to Reuters Estimates.
The company said it expects net revenue for 2006 to grow in the mid to upper single-digit range and gross margin to be 71 percent to 73 percent.
Wyeth said interest expense is expected to be significantly higher than 2005 levels, reflecting payments related to litigation and settlements over its withdrawn diet drug combination known as "fen-phen."
{{#rendered}} {{/rendered}}The company has taken more than $21 billion in charges related to liability lawsuits involving the drug that was pulled from the market in 1997 after it was found to cause serious heart valve damage.
Wyeth shares were up nearly 1 percent to $47.99 in extended trading on Inet electronic brokerage from their New York Stock Exchange close at $47.52.