Wyeth Misses Earnings Expectations, Issues Tepid 2007 Guidance
Wyeth posted a fourth-quarter profit of 66 cents a share, excluding special items, on sales of $5.22 billion. Analysts surveyed by Thomson Financial expected earnings of 71 cents a share on sales of $5.12 billion.
Shares of the Madison, N.J. company fell after the pharmaceutical firm issued its quarterly report and gave lukewarm fiscal 2007 guidance.
Sales of depression treatment Effexor rose 11% to $936 million, and sales of Prevnar, a vaccine used to treat pneumococcal disease, jumped 25% to $502 million.
Goldman Sachs pharmaceutical analyst James Kelly attributed the earnings miss to higher costs.
"Revenues for key products were mainly in line with our view," Kelly wrote in a report sent to clients Tuesday morning. "We would expect the shares to trade lower on the earnings miss."
Looking ahead, Wyeth gave guidance for fiscal 2007 earnings in a range of $3.40 to $3.50 a share, with revenue growth in the "mid-to-high single digits," the company said in a release. Analysts, on average, expect annual earnings of $3.49 a share and revenue growth of 6%.
Kelly said Wyeth's forecast for a higher tax rate 27% to 29% "appears to be a large negative contributor." The company's 2006 tax rate was 24%.
On Monday, a state jury in Philadelphia found Wyeth's hormone replacement therapy (HRT) Prempro was responsible for a woman's breast cancer and ordered the drugmaker to pay $1.5 million in damages.
