Schering-Plough Posts Higher Profit for Fourth Quarter
Schering-Plough reported higher fourth-quarter earnings in-line with Wall Street expectations.
The Kenilworth, N.J.-based company posted net income of $182 million, or 12 cents a share, up from $104 million, or seven cents a share, in the year-ago quarter. Earnings were led by strong sales of arthritis treatment Remicade.
Chief executive Fred Hassan told CNBC that the drug company's latest earnings are a further sign that a three-year-old restructuring is having a positive impact.
"We are going into this year with momentum, we are growing very nicely on the top line, we're exerting financial discipline, and our bottom line is growing faster than our top line," Hassan said in an appearance on "Power Lunch" on Monday. "That's a great strategy to have."
Excluding one-time charges of five cents a share, the company earned 17 cents a share, consistent with the Thomson Financial consensus estimate.
Fourth-quarter sales rose 14% from the same quarter a year ago to $2.7 billion, compared with analysts' estimate of $2.53 billion.
Cholesterol drugs accounted for $1.1 billion of those sales. Remicade sales rose 34% from the year-ago period to $337 million.
Barbara Ryan of Deutsche Bank Securities said the company's co-marketing alliance with Merck for cholesterol drug Vytorin has created far greater earnings leverage than the analyst previously expected.
"We continue to believe that the lion's share of the upside in the share price from here may be dependent on Schering-Plough's ability to build on this successful franchise with yet another," Ryan said in a client note Monday.
The analyst reiterated a "hold" rating on Schering-Plough shares with a price target of $24.