Earnings Reports for Oct. 30
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Union Carbide Slumps on Energy Costs
Union Carbide,which is being acquired by Dow Chemical, said today itsthird-quarter profits fell 62 percent, hurt by rising costs ofenergy and raw materials, but it still beat revised earningsexpectations.
Union Carbide said net income fell to $29 million, or 22cents per diluted share for the quarter ending Sept. 30,compared with $77 million, or 58 cents a share in the yearearlier period. The year-ago period included a gain of 21 centsper share from a litigation settlement.
The company warned earlier this month that its earningswould be in the range of 20 cents a share, while analysts hadat the time been expecting 57 cents a share for the company.Since then, analysts on average have lowered their estimates to20 cents a share, according to First Call/Thomson Financial.
Revenues rose to $1.64 billion for the third-quarter ofthis year, up 9.2 percent from $1.50 billion a year ago.
Union Carbide, along with other chemical companies, hasbeen hard hit by rising prices for crude oil and natural gas,key raw materials in the chemicals industry.
Lower selling prices for polyethylene and ethylene glycolcompared with prior quarters also hurt profit margins andearnings, Union Carbide said. Those products are used inplastic manufacturing.
Union Carbide Chairman and Chief Executive William Joycesaid in a statement that he was confident that capacityadditions and infrastructure improvements made during the pastfive years would add to future earnings and the success of thecombined companies following completion of the planned DowChemical/Union Carbide merger.BACK TO TOP
Strike Hits Verizon’s Bottom Line
Verizon Communications, theNo. 1 U.S. local telephone company, said today third-quarter profits were flat as costs of an 18-day laborstrike offset growth in sales of data and wireless services.
Verizon, the company formed by the merger of Bell Atlantic and GTE , said profits, excluding one-time items,were $2 billion, or 73 cents a share, compared with $2billion, or 72 cents a share a year ago. The results met WallStreet’s expectations of 73 cents a share, according toresearch firm First Call/Thomson Financial.
Including gains on assets sales and other adjustments,profits rose almost 40 percent to $3.5 billion, or $1.27 ashare, compared with $2.5 billion, or 91 cents a share, in thethird quarter 1999.
The New York-based company said revenues rose 7.2 percentto $16.5 billion from $15.4 billion in the third quarter 1999.Without the labor strike, revenue growth would have been about7.4 percent.
Verizon in August cut its profit outlook for 2000 and 2001.It confirmed today it expects to generate “solid revenuegrowth” and earn 76-78 cents in the fourth quarter, in linewith Wall Street expectations. It expects revenue growth toaccelerate to 8-10 percent in 2001. It aims to post annualearnings per share growth in the mid-teens by 2003.BACK TO TOP
Pharmacia’s Profits Rise 61 Percent
U.S.-Swedish drug makerPharmacia reported today a 61 percent rise inadjusted third-quarter profits, matching Wall Street estimates,citing potent sales of its arthritis and glaucoma medicines.
The Peapack, N.J.-based maker of the blockbuster arthritisdrug Celebrex and anti-anxiety medicine Xanax, posted adjustedearnings from continuing operations of $427 million, or 33cents per share, up from $265 million, or 21 cents per share,in the year-ago period. Adjusted results exclude items relatedto the April acquisition of Monsanto Co.
Analysts on average had predicted Pharmacia, which isdeveloping drugs to treat breast cancer and colorectal cancer,would earn 33 cents per share, according to research firm FirstCall/Thomson Financial.
The company reported a 15 percent jump in sales, to $4.3billion. Sales of Celebrex reached $687 million, and sales ofthe glaucoma treatment Xalatan rose 36 percent to $185million.
In response to new accounting guidance for revenuerecognition and its decision to retain exclusive marketingrights to its recently filed COX-2 compound, pain-killerparecoxib, the company adjusted its outlook and now expectsfull-year earnings per share to grow about 30 percent in 2000,and 20 percent-25 percent in 2001, after the dilutive impact ofthe recent initial public offering of the Monsanto agriculturalbusiness.
Parecoxib, which Pharmacia submitted for approval to theU.S. Food and Drug Administration today, is a secondgeneration COX-2 drug intended to be the follow-up drug toCelebrex. COX-2 inhibitors are a new class of arthritis drugsthat work by selectively blocking the COX-2 enzyme, which hasbeen linked to inflammation.
The company said reported results for the third quarterinclude a charge of $154 million after taxes, or 12 cents pershare, in merger and restructuring costs.
Pharmacia reported a 15 percent increase in net sales to$4.3 billion, led by a 20 percent jump in pharmaceutical salesto $3.28 billion. U.S. pharmaceutical sales rose 34 percent.
Agricultural sales, as represented by the Monsanto unit,were up 2 percent. Monsanto had a net loss of $45 million inthe quarter, excluding certain one-time charges. That is a $38million narrower loss than in the 1999 third quarter.
Sales of colorectal cancer medicine Campostar soared 65percent to $134 million. Detrol/Detrusitol, a therapy for anoveractive bladder, had sales of $125 million.
Sales of insomnia drug Ambien rose 81 percent to $233million.
The company said that several of its drugs, includingAmbien and growth hormone Genotropin, have been stocked atunusual levels by wholesalers, which has already driven downsales growth or will negatively affect sales on those drugs inthe future.BACK TO TOP
