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Schering-Plough 2Q Profit Soars

NEWARK, N.J. -

Schering-Plough Corp. said Monday its second-quarter profit more than doubled as revenue climbed 13 percent on the strength of cholesterol drugs Vytorin and Zetia.

Net income climbed to $517 million, or 34 cents per share, after preferred dividends for the quarter ended June 30 from $237 million, or 16 cents per share, a year ago. Excluding charges related to a licensing payment and the planned acquisition of Organon BioSciences NV by year’s end, the Kenilworth-based company would have earned 41 cents per share.

Sales grew to $3.18 billion from $2.82 billion a year ago.

Analysts surveyed by Thomson Financial expected a profit of 35 cents per share excluding one-time items on sales of $3.07 billion.

Assuming it got half the revenues from its global cholesterol joint venture with Merck & Co., Schering-Plough’s adjusted net sales would have totaled $3.8 billion, up 15 percent year-over-year. The joint venture also brought it $490 million in equity income.

Despite the big jump in profit and the company beating analysts’ expectations, Schering-Plough shares slipped 3 cents to $31.46 in afternoon trading after rising as high as $32.50 earlier in the session. Their 52-week high is $33.81.

Analyst Steve Brozak of WBB Securities said the report “was anticlimactic” given investors’ high expectations and the lack of any new growth initiatives.

“You have to tell people how you’re going to knock the cover off the ball going into the future,” Brozak said.

Unlike other major drug companies, Schering-Plough does not give profit forecasts - often key to boosting stock price - and has not since turnaround expert Fred Hassan four years ago was brought in as CEO to salvage the then-struggling company.

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Chris Schott of Bank of America Securities wrote in a research note that sales were modestly above expectations. He said the Organon acquisition “represents a catalyst” that should add to earnings and further diversify profits away from the cholesterol drugs, which now represent about 65 percent of earnings.

“Seven out of our 10 largest-selling products, including Vytorin and Zetia, posted double-digit sales growth for the quarter,” Hassan told analysts Monday.

The top-selling products and their results: Remicade, for arthritis and other inflammatory immune disorders, up 28 percent to $394 million; Nasonex, for allergies, up 22 percent to $295 million; Pegintron, hepatitis C, up 3 percent to $234 million; Clarinex, an antihistamine, up 11 percent to $250 million; and Temodar, for brain tumors, grew 26 percent to $216 million.

The company’s consumer health care segment posted $394 million in sales in the second quarter, up 13 percent compared with a year earlier. The increase was driven by higher sales of over-the-counter Claritin, and the February launch of MiraLAX, marking the first switch from prescription to over-the-counter sales in the laxative category in more than 30 years.

Sales in the animal health segment increased 10 percent to $264 million in the quarter with international growth led by the poultry, companion animal, aquaculture and swine product lines, along with a positive impact from currency exchange rates.

For the first half of the year, Schering-Plough earned $1.06 billion, or 70 cents a share, after paying preferred stock dividends, versus $587 million, or 40 cents a share, a year ago. Half-year sales rose to $6.2 billion from $5.4 billion a year ago.

This entry was posted on Sunday, July 29th, 2007 at 7:07 pm and is filed under Flonase Top News. You can follow any responses to this entry through the RSS 2.0 feed. Responses are currently closed, but you can trackback from your own site.