Earnings Reports for Oct. 23

The Madison, N.J.-based maker of Advil, Robitussin and the oestrogen replacement drug Premarin reported net income of $762 million, or 58 cents per share, in the third quarter vs. a net loss of $2.87 billion, or $2.20 cents, in the year-ago period.

The year-ago loss mainly reflected a $4.75 billion litigation charge for a settlement related to the diet drugs Redux and Pondimin. Excluding this charge from the 1999 third-quarter results, income from continuing operations in the latest quarter increased 18 percent to $762 million from $645 million.

Analysts on average had estimated that the company, whose Wyeth-Ayerst unit will pay the U.S. government $30 million for violations at two plants, would post earnings of 58 cents per share, according to research firm First Call/Thomson Financial.

Looking forward, AHP said it expects additional reserves will be required in the diet drug settlement. It said that though it is still unclear how much that will amount to, AHP expects it to be lower than the $4.75 billion recorded in the 1999 third quarter.

A spokesman for the company declined to specify a range of the amount of reserves that would be used.

Patients typically combined either Pondimin or Redux with another diet suppressant called phentermine to make the “fen-phen” diet cocktail. AHP recalled Pondimin and Redux in 1997 after some of the 6 million Americans who had taken fen-phen developed heart problems, including leaky valves.

Overall net sales increased 13 percent from the same quarter last year.

Worldwide pharmaceutical sales increased 14 percent for the quarter, sparked by higher revenues from recently approved pneumococcal vaccine Prevnar, meningitis treatment Meningitic, arthritis treatment Enbrel and ulcer medicine Protonix. Sales of Effexor XR, for which American Home Products received an expanded indication, also showed strong growth.

Excluding the negative impact of foreign exchange rates, worldwide pharmaceutical sales increased 17 percent for the 2000 third quarter.

Global consumer health care sales increased 7 percent for the quarter, as sales of the Centrum family of vitamin products rose. However, the company experienced a sales slowdown for cold, cough and allergy products, as well as for pain reliever Anacin.

Excluding the effect of weak foreign currencies, worldwide consumer health care sales increased 8 percent for the quarter.

“The double-digit sales and earnings growth through the first three quarters of 2000 have been driven by increased demand for franchise products and enhanced by an impressive number of new products introduced into the marketplace,” said Chairman and Chief Executive Officer John Stafford in a statement. BACK TO TOP

Raytheon Meets Expectations

Raytheon’s third-quarter earnings met Wall Street’s expectations, reversing a loss from the year-ago period, helped by an increase in aircraft deliveries.

For the three months ended Sept. 30, Raytheon earned $105 million, or 31 cents per share, up from a loss of $163 million, or 48 cents per share in the year-ago period.

Earnings from continuing operations were $133 million, or 39 cents per share, in line with a consensus estimate from analysts surveyed by First Call/Thomson Financial.

The Lexington, Mass.-based aerospace and defense company lost $89 million, or 26 cents per share, from continuing operations in the year-ago period, in part due to charges of $464 million, or 84 cents per share.

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