Schering-Plough posts another loss

TRENTON, N.J. -- Struggling drug maker Schering-Plough Corp. posted its second straight quarterly loss in the fourth quarter, mainly due to falling sales and a large restructuring charge for previously disclosed plans to make job cuts.

The Kenilworth-based maker of Clarinex allergy medicine and hepatitis C treatments also reported a full-year loss, the first since the company was formed by a 1970 merger.

Schering-Plough said Monday it recorded a fourth-quarter net loss of $181 million, or 12 cents per share, versus a profit of $313 million, or 21 cents a share, a year ago.

Excluding special charges of $229 million, or 13 cents per share, the company had a profit of 1 cent a share. Analysts surveyed by Thomson First Call had been expecting a 4-cent profit.

The charges included $179 million for employee termination costs and $50 million to write down the value of some assets. In early December, Schering-Plough said it was cutting payroll expenses by 10 percent companywide, although no cuts are being made in sales or among employees working on government-ordered manufacturing upgrades.

New chief financial officer Robert Bertolini said 900 people accepted an early retirement package, out of 2,400 eligible U.S. employees. In addition, Schering-Plough is eliminating 170 jobs at an Irish plant that makes its top-selling medicine, an advanced hepatitis C treatment called Peg-Intron, because of falling sales.

The company, with about 30,000 employees worldwide, said more job cuts will come this year.

"I think the biggest confusion and the biggest changes are probably behind us," chief executive Fred Hassan, who took over last April, told analysts during a conference call.

He said long-term strategies are in place for boosting sales of key brands, and cost-cutting efforts, including eliminating profit sharing and employee bonuses in 2003, should help the bottom line soon. Results in 2004, which Hassan described as a year of "repair and cleanup" before things turn around, are expected to be worse than last year, excluding one-time charges. The company is not giving specific guidance.

Fourth-quarter revenues were down 18 percent, to $1.95 billion from $2.37 billion a year earlier, despite a 6 percent boost from favorable currency exchange rates. Sales of the company's top product line, Intron and other hepatitis C drugs, plunged 55 percent to $369 million due to increased competition.

Total pharmaceutical sales were down 21 percent to $1.52 billion, with U.S. sales dropping 52 percent from the year-ago quarter to $426 million. Foreign pharmaceutical revenues grew 5 percent. Meanwhile, consumer health product sales fell 14 percent to $218 million. Only the animal health care division fared well, with revenues rising 11 percent to $214 million.

"We are making good progress in stabilizing our allergy franchises and building market share in the cholesterol-treatment market in spite of the aggressive launch of a new competitor," AstraZeneca's statin drug Crestor, said Hassan.

Schering-Plough shares rose 33 cents to close at $17.85 on the New York Stock Exchange.

Copyright C 2004 Deseret News Publishing Co.
Provided by ProQuest Information and Learning Company. All rights Reserved.