Earnings Preview: Bristol-Myers Squibb's 1st-quarter report
NEW YORK—Bristol-Myers Squibb Co. reports earnings for the first quarter on Thursday. The following is a summary of key developments and analyst opinion related to the period.
OVERVIEW: The company entered the quarter aiming to cut 10 percent of its work force and shutter more than half its manufacturing plants. Bristol-Myers and many other pharmaceutical companies have been cutting costs as they grapple with a tougher regulatory environment and the loss of blockbuster drug patents, coupled with thin development pipelines.
In January, antitrust regulators cleared Bristol-Myers' $525 million sale of its medical imaging unit. The sale is part of the company's restructuring program.
In February, the company's bipolar disorder drug Abilify received expanded approval for use in adolescents, opening up another market for the treatment. Still, cancer drug Taxol faced increased generic competition during the quarter while data from a large study of HIV patients showed patients on Bristol-Myers' Videx had an increased risk of heart attack.
BY THE NUMBERS: Analysts polled by Thomson Financial, on average, forecast first-quarter earnings of 41 cents per share on $5.12 billion worth of revenue.
ANALYST TAKE: Sales of blood-thinners Plavix and Abilify should drive first-quarter profit, several analysts said. The company, like several of its peers, will also likely benefit from the weaker dollar's positive effect on international sales.
Citi analyst George Grofik expects surges in sales of Sprycel and Orencia, which treat leukemia and rheumatoid arthritis, respectively. Still, last week he forecast profit 2 cents below Wall Street expectations, saying the company's tax rate guidance could be too low because it assumed a research and development tax credit that was never enacted.
WHAT'S AHEAD: Wall Street is looking for updated study data for new Sprycel and Orencia indications in 2008. Meanwhile, the company is mulling the possible sale of its non-pharmaceutical businesses.
"The sale of the company's medical imaging business closed in January and we hope to hear color on the level of interest it is receiving for the nutritionals and ConvaTec businesses, and how it may deploy proceeds received from a potential sale," said Citi analyst George Grofik. Those assets could be worth more than $10 billion in a sale, he added.
STOCK PERFORMANCE: Shares of Bristol-Myers fell about 20 percent during the first quarter to close at $21.30. The stock fell to $20.05 on March 17, its lowest point in nearly seven years.
