Good financial results from three Pharma biggies should cheer up those market-watchers who moaned their way through much of last week. Sure, a couple of the profit leaps came at least in part from one-time gains. But increases are always better than the alternative. Here's the news:
- Novartis [1] reported an estimate-beating 6.8 percent increase in profits. Healthy sales of both Diovan and Gleevec helped, and so did the company's cost-cutting program. So did the weak dollar. But the real stars of the story were generic meds, over-the-counter products, animal drugs, and contact lenses; double-digit growth here offset a decline in brand-name drug sales. Profits rose to $2.32 billion on an 8.6 percent increase in revenue to $9.91 billion.
- Merck [2] also benefited from the weaker dollar, but its dramatic near-doubling in net income to $3.3 billion was mostly attributed to a one-time $1.4 billion gain on its limited partnership with AstraZeneca. Still, Merck's earnings excluding that item--89 cents--beat analysts' expectations of 86 cents. Revenues didn't meet the street's goals, however; analysts had projected $6.11 billion, but the company reported $5.82 billion. The 0.9 percent growth in sales included a four percentage-point boost off foreign exchange rates.
- Eli Lilly's [3] sales grew a striking 14 percent, with 8 percentage points of that coming from actual increases in sales volume; foreign exchange rates and price increases accounted for 5 percentage points and 1 percentage point, respectively. A big-gaining drug was Cymbalta, an antidepressant that posted 37 percent growth. Like Merck, Lilly reported a big one-time tax gain, posting net income of $1.06 billion, or 97 cents per share, compared with $508.7 million or 47 cents per share same quarter last year. Restructuring and acquisition costs depressed earnings last year, though; excluding items, the earnings per share gain was actually 9 cents, to 92 cents from 83 cents.
- get the Financial Times news [4] on Novartis
- see the WSJ report [5]
- read the Associated Press' news [6] on Merck
- see the release [7] on Lilly
- check out the Merck and Lilly numbers [8] in the WSJ