BMS LOSES $134 MILLION IN FOURTH QUARTER
Bristol-Myers Squibb (BMS) reported a net loss from continuing operations of $134 million on sales of $4.2 billion in the fourth quarter of 2006, compared with net earnings of $499 million on sales of $5 billion for the same period in 2005.
According to the company, the loss was caused by an increase in the amount of money it has set aside to pay for possible litigation expenses, up to $353 million, and early debt retirement costs. "Debt restructuring will significantly improve liquidity and reduce interest payments," Executive Vice President and Chief Financial Officer Andrew Bonfield said during a conference call to discuss the company's results.
The "litigation reserves" relate to "the settlement in principle of pricing and sales investigations," BMS said. Last month the company said it would pay $499 million to the government and sign a corporate integrity agreement under an agreement in principle for a civil resolution of "several investigations involving the company's drug pricing and sales and marketing activities."
Even without these problems, BMS' net earnings from continuing operations were lower, at $380 million, than the $601 million from the year before. The company blamed this decline mainly on "the impact of the at-risk launch of generic [Plavix (clopidogrel bisulfate)] in August 2006, which continued to have a significant adverse effect in the fourth quarter, and the loss of patent exclusivity on Pravachol in major markets."
For 2006 as a whole, the company reported that net sales from continuing operations were $17.9 billion, down 7 percent from $19.2 billion in 2005, and net earnings were $1.6 billion, just over half the $3 billion the company recorded the previous year. Excluding "specified items," the net earnings total was $2.1 billion in 2006, down 25 percent from $2.8 billion in 2005.