Drugmaker Bristol-Myers Squibb Co. said Thursday that its second-quarter profit fell nearly 3 percent due to higher taxes and increased overhead, which was partly offset by a 14 percent jump in sales.
The company, which sells blockbuster blood thinner Plavix, still beat Wall Street expectations, and it increased its earnings-per-share forecast for 2011 by 8 to 10 cents, driving shares up more than 2 percent at one point.
New York-based Bristol-Myers said net income was $902 million, or 52 cents per share, down from $927 million, or 53 cents a share, a year earlier. Excluding a total of $69 million in one-time restructuring and licensing charges, it would have made 56 cents per share.
Analysts surveyed by FactSet were expecting, on average, 55 cents per share and revenue of $5.05 billion.
Revenue totaled $5.43 billion, up from $4.77 billion in 2010's second quarter, on strong increases for most drugs and encouraging initial sales for a new skin cancer medicine, Yervoy, that the company touts as a breakthrough.
"We had a very good second quarter across all our operations globally. We continue to demonstrate that our biopharmaceutical strategy is delivering results," Chief Executive Lamberto Andreotti told analysts during a conference call.
Unlike the many drugmakers diversifying into vaccines and consumer and animal health products, Bristol-Myers increasingly is specializing in complex biologic drugs for unmet needs.
Edward Jones analyst Linda Bannister called the quarter "solid," adding Yervoy's launch "has been better than expected, and they continue to execute well."
In trading Thursday, shares of Bristol-Myers added 44 cents to $29.05, then rose 13 cents in after-hours trading.
The company raised its full-year profit forecast to $2.08 to $2.18 per share, or $2.20 to $2.30 per share excluding one-time items. In January, it gave a forecast of $2 to $2.10 per share, or $2.10 to $2.20 excluding one-time items. It expects revenue to grow in the high-single digits for the year and advertising spending to fall by the mid-single digits, because looming patent expirations for Plavix and blood pressure drug Avapro will end consumer ads for them.
Bristol also confirmed its forecast of $1.95 per share, excluding one-time items, for 2013. That's the first full year after generic competition starts slashing Plavix revenue.
"The big question is whether (the $1.95 forecast is) conservative, because of the drugs they recently launched and what they have in their pipeline," Bannister said.
Andreotti noted the company has had three new products approved in three months: just-launched Yervoy for advanced skin cancer, Nulojix for preventing rejection of transplanted kidneys and Eliquis, an anticlotting drug approved in Europe for preventing dangerous blood clots after knee or hip replacement surgery. Bristol and partner Pfizer Inc. plan to apply for U.S. approval of Eliquis later this year.
Two drugs got approved in other big markets: leukemia drug Sprycel in Japan and Type 2 diabetes drug Onglyza, which has had disappointing sales since its 2009 launch, in China.
However, dapagliflozin, a newer Type 2 diabetes drug in a different class, faces a tough road after U.S. Food and Drug Administration advisers this month recommended against approving it because a study found higher rates of bladder and breast cancer compared with patients getting dummy pills.
"We are not at all dissuaded. We will work with the FDA," Andreotti told the analysts. "We do believe in this product and remain firmly committed to its success."
Top seller Plavix, which faces generic competition next May, had sales jump by 15 percent to $1.87 billion, and bipolar disorder treatment Abilify rose 12 percent to $706 million. Rheumatoid arthritis drug Orencia, Baraclude for hepatitis B and Sprycel for leukemia were all up by more than 25 percent, for a total of $713 million. Yervoy brought in $95 million.
But blood pressure drugs Avapro and Avalide, hurt by supply problems that have been mostly resolved, saw sales drop 18 percent to $251 million.
The company's tax rate jumped to 27 percent, from 20.4 percent a year ago, boosting income taxes to $483 million. The company said it had about $50 million, or 3 cents a share, in costs related to the health care overhaul _ an industry fee and bigger drug discounts to help Medicare patients when they hit the doughnut hole where drug coverage lapses temporarily.
Favorable currency exchange rates pushed up sales by 4 percent, but also increased production, administration and marketing costs, the company said.
For the first six months, Bristol-Myers reported net income of $1.89 billion, or $1.10 per share. That was up 13 percent from $1.67 billion, or 96 cents per share, in the first half of 2010. Revenue was up 9 percent, to $10.45 billion from $9.58 billion.