Schering-Plough 3Q Earnings Down 16% On Charges

Date : 10/22/2009 @ 7:13AM
Source : Dow Jones News
Stock : Schering-Plough Corp. (SGP)
Quote : 28.15  0.0 (0.00%) @ 2:05AM

Schering-Plough 3Q Earnings Down 16% On Charges

Schering Plough (NYSE:SGP)
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Schering-Plough Corp.'s (SGP) third-quarter profit fell 16% on increased charges while the company saw a 5% drop in sales of the cholesterol drugs it sells jointly with merger partner Merck & Co. (MRK)

The companies' joint venture has been under pressure since an early 2008 study raised questions about the safety and effectiveness of Vytorin and Zetia. Meanwhile, the $49 billion Schering-Merck deal announced in March remains on track to close in the current quarter. Merck is buying Schering to diversify its pipeline, a move sparked by continuing generic competition, pricing pressure and difficulty in bringing new drugs to market.

Schering-Plough's earnings dropped to $515 million, or 29 cents a share, from $677 million, or 39 cents a share, a year earlier. Excluding acquisition-related charges and other impacts, earnings rose to 40 cents from 39 cents.

Net sales fell 1.7% to $4.5 billion, reflecting a 6-percentage-point hit from currency changes.

Analysts surveyed by Thomson Reuters were expecting earnings, excluding items, of 40 cents a share on revenue of $4.47 billion.

Gross margin fell to 61.8% from 62% on the charges, and fell 1 percentage point excluding them on the currency chanages.

Three-fifths of the cholesterol venture's sales drop was due to the foreign-exchange fluctuations. Sales slid 10% in the U.S.

Among Schering-Plough's non-cholesterol treatments, sales of arthritis drug Remicade rose 8%, or 18% excluding currency changes, while allergy treatment Nasonex saw a 3% increase, also held back by foreign exchange rates. Cancer drug Temodar grew 2%.

Schering-Plough shares closed Wednesday at $29.01 and didn't trade premarket. The stock is up 70% this year.

Merck is expected to report its results later Thursday.

-By Mike Barris and Kevin Kingsbury, Dow Jones Newswires; 212-416-2330; mike.barris@dowjones.com

 
 

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