Bristol-Myers Squibb And The Case Of The Disappearing Penny


This morning on "Squawk on the Street" I did a pharma earnings round-up report and I topped it by saying the sector could remain under pressure today because two major American drug companies--Bristol-Myers Squibb and Wyeth --missed earnings expectations and lowered their 2008 guidance.

I then went on to say that BMY came in a penny shy and dropped its EPS range for this year to a penny below the current consensus at the high end. The lowered guidance is likely what's driving down the stock this morning.

When I get back to my desk there's an email from a Bristol PR person saying I was incorrect and that BMY actually beat by a penny. And then a PR person called our assignment desk with the same claim and demanding we correct the "mistake." We ended up doing a correction/clarification later in the show, but now I don't think it was warranted.

Here's an excerpt from the very top of the press release BMY issued just after 7:36:59 ET this morning on the PR Newswire:

"Posts Fourth Quarter and Full Year 2007 Non-GAAP EPS of $0.33 and $1.38 from Continuing Operations ($0.35 and $1.48, including Discontinued Operations), Exceeding Top End of Non-GAAP Guidance Range"

(GAAP stands for Generally Accepted Accounting Principles.)

As a result, several news outlets including CNBC, Dow Jones, Associated Press and MarketWatch reported that BMY missed the 34-cent consensus by one cent.

Curiously, when I just went to the Bristol-Myers Squibb web site to take another look at the press release, at first the page came up as "inactive." Okay, that could be some kind of computer snafu. Then a few seconds later the press release was back up, but guess what? The line that led to the widespread "confusion" is gone! Disappeared. You can check it out for yourself.

Now, the line about 4th quarter EPS simply says: "GAAP Loss Per Share of $0.07 and 2007 Full Year GAAP EPS of $0.99 from Continuing Operations, Impacted by Specified Items." There's no longer a reference to 33 cents or 35 cents in the headline. Hmmm. And in the unchanged second graph, it goes on to say that non-GAAP Q4 EPS was 33 cents.

I've sent an email to the Bristol PR person asking if they've changed the press release. We had an ongoing email conversation this morning over the alleged "error." But this time I have not yet received a response. I will update this post if/when I get one.

UPDATE: A Bristol PR person, in an email, tells me the discrepancy between the two press releases is due to "a PR Newswire mistake that we just noticed...." She goes on to say, "...for some reason they sent a corrupted file."

But a source of mine who has had years of experience on the corporate side putting out earnings press releases says that standard operating procedure is for a company to send its earnings release to PR newswire well ahead of time. Then, I'm told PR Newswire sends it back to the company to proofread it again before telling PR Newswire that it's locked and loaded and good to go.

UPDATE 2: I am still waiting to hear back from PR Newswire. But, in the meantime, I went to the SEC's web siteto see if the correct or the "corrupted" press release was posted there. It's the original version with the confusing line about Q4 EPS and which Bristol claims was inadvertantly distributed by PR Newswire. But I don't think PR Newswire submits filings to the SEC. Again, you can see it for yourself here.

UPDATE 3:Click here for my update.The case is now closed.

Questions? Comments?