Double-Digit Gains at Pfizer, Schering-Plough

Pfizer Inc. and Schering-Plough Corp. on Tuesday posted double-digit profit gains in their third quarter on strong sales of blockbuster medicines, but Pfizer shares fell on what some analysts said was disappointing growth of its cholesterol fighter Lipitor.

Pfizer, the world’s largest drug maker, said earnings from operating rose 30% to $1.71 billion, or 27 cents a share, beating the consensus Wall Street estimate of 25 cents.

Lower-than-expected expenses and growing sales of Lipitor and the arthritis drug Celebrex helped boost Pfizer’s results.

Total revenue rose 7% to $7.21 billion, with sales of Lipitor, Pfizer’s crown jewel, up 22% to $1.22 billion.

But some analysts had anticipated an even stronger contribution from Lipitor, which Pfizer seized in its unfriendly acquisition earlier this year of Warner-Lambert Co.

“I was expecting Lipitor sales to be north of $1.3 billion, but they came in at $1.2 billion,” said ABN Amro analyst Mario Corso. He added, however, that wholesale stocking patterns, rather than any tapering of demand growth, appeared to be the reason.

Pfizer executives said unusual stocking patterns by wholesalers are returning to normal and should be straightened out by year-end.

Sales of Pfizer’s anticonvulsant treatment Neurontin leaped 42%, sales of its anti-impotence drug jumped 36%, and sales of antidepressant Zoloft gained 7%.

Looking forward, Pfizer said it was confident its earnings for 2000 would hit $1.01, 1 cent higher than its previous estimate.

Pfizer shares fell $2.38, or 5%, to close at $43 on the New York Stock Exchange.

Schering-Plough, meanwhile, said earnings rose 14% to $591 million, or 40 cents a share, as its allergy drug Claritin and hepatitis C medication, Rebetron, continued to expand their global sway. The results matched Wall Street estimates.

The firm said it expected earnings per share for 2000 to be in line with analysts’ forecasts of $1.64 per share.

Sales grew 7% to $2.4 billion, led by a 10% jump in sales of Claritin. Combined sales of Rebetron and Intron A, an antiviral component of Rebetron that also treats cancer, rose 24%.

Shares of Madison, N.J.-based Schering-Plough fell 50 cents to close at $52.50 on the NYSE.

At a Glance

Other earnings, excluding one-time gains or charges unless noted, include:

* Ameritrade Holding Corp. reported profit of $286,000, or less than a penny a share, contrasted with a loss of $9.2 million, or 5 cents, a year ago, beating estimates of a 3-cent-a-share loss. Revenue grew 75% to $156 million, as trade commissions and clearing fees jumped 72% and interest income increased 79%.

* Barr Laboratories Inc. said fiscal first-quarter earnings grew 20% to $14.2 million, or 38 cents a share, in line with forecasts, but said profit for the full year would be lower than expected as it boosts spending for generic drug research. The latest results beat estimates by one penny. Revenue increased 13% to $111.8 million, led by higher sales of tamoxifen, a drug for treating breast cancer.

* Blockbuster Inc. said cash earnings rose 2.7% to $22.6 million, or 13 cents a share, beating expectations of 10 cents. The company, which is 82% owned by Viacom, said revenue increased 7.3% to $1.19 billion.

* Bowater Inc., the biggest U.S. newsprint maker, had third-quarter profit from operations of $56.5 million, or $1.08 a share, well beyond expectations of 96 cents, as newspapers’ surge in advertising enabled it to boost prices. In the year-ago quarter, Bowater had a loss of $16.5 million, or 30 cents a share. Sales rose 23% to $628 million.

* CSX Corp. said third-quarter profit fell 50% to $59 million, or 28 cents a share, a penny better than forecasts, as fuel costs rose and delay-related expenses continued from integrating part of former Conrail Inc. Revenue fell 27% to $2.04 billion, reflecting the sale of Sea-Land shipping and a freight management business.

* Colgate-Palmolive Co. said third-quarter net income rose 15% to $275.3 million, or 44 cents a share, as cost cutting more than offset higher oil prices and the effects of the weak euro. Revenue rose 2% to $2.37 billion. The consumer products company, which last month told analysts to cut sales forecasts because of the falling euro, said revenue was up 7%, excluding the currency effect. Colgate said it will meet analysts’ earnings forecasts for its fourth quarter and 2001.

* Dial Corp.’s earnings plunged 86% in its third quarter to $4.4 million, or 5 cents a share, as sales fell 6% to $411.1 million. The maker of consumer products and canned meat said higher raw material costs contributed to the weakness. Analysts on average had expected Dial, whose management is trying to decide whether to put the company up for sale, to post earnings of 3 cents. That estimate was revised down from 14 cents after Dial warned that earnings would drop to 3 cents to 5 cents.

* Estee Lauder Cos. said fiscal first-quarter earnings rose 15% to $94.6 million, or 37 cents a share, a penny better than estimates, as sales rose 7.7% to $1.18 billion. The cosmetics maker had cut sales forecasts last month because of the falling euro.

* Goodyear Tire & Rubber Co., the world’s largest tire maker, reported a third-quarter loss of $6.6 million, or 4 cents a share, citing a host of issues, notably soaring costs for raw materials and energy and less demand from domestic car and truck makers. In the year-ago period, Goodyear posted earnings of $109 million, or 69 cents, including an after-tax gain of $143.7 million. The loss was 2 cents more than analysts had expected. The estimates were revised down from earnings of 29 cents after Goodyear warned of lower results. Sales rose 5.9% to $3.5 billion.

* Halliburton Co., the world’s largest oil-field services company, said third-quarter profit climbed 88% to $109 million, or 24 cents a share, a penny better than expected, as big oil and natural-gas companies spent more on its products for finding and producing oil and natural gas. Revenue was up 1.7% to $3.02 billion.

* Hershey Foods Corp. reported a 23% increase in third-quarter earnings to $107.4 million, or 78 cents per share, 2 cents better than expectations, on a 12% rise in revenue to $1.20 billion.

* Lear Corp. said third-quarter earnings fell 1.8% to $38.6 million, or 59 cents a share, but beat expectations of 56 cents. Sales rose 3.2% to $3.14 billion.

* Newell Rubbermaid Inc. reported a slight 0.8% increase in third-quarter profit to $125.6 million, or 47 cents a share, and said it expects lower fourth-quarter earnings that will fall sharply below estimates. Sales rose 4.8% to $1.69 billion. But the company said order rates have been disappointing since last month, and it expects that weakness to continue for the rest of the quarter. * Qwest Communications International Inc.’s third-quarter profit rose 19% to $231 million, or 14 cents a share, beating forecasts of 9 cents, on higher sales of Internet and data-transmission services. Revenue rose 12% to $4.77 billion.

* Snap-On Inc. said profit fell 27% in its third quarter to $26.9 million, or 46 cents a share, meeting downward revised forecasts, on weakness in the euro and the vehicle repair industry. Sales rose 13% to $511.8 million.

* Spiegel Inc. said third-quarter profit more than tripled to $13.5 million, or 10 cents a share, from $4.2 million, or 3 cents, a year ago. The retailer said sales grew 7.2% to $757.6 million, bolstered by a 67% jump in credit card revenue. For the full year, Spiegel said it expects earnings in the range of 92 cents to $1.05 a share because of sluggish demand for its Eddie Bauer clothing. Analysts on average were expecting $1.01 a share for the year.

* Tyco International Ltd.’s profit jumped 40% in its fiscal fourth quarter to $1.1 billion, or 64 cents a share, as sales from acquisitions added to growth at the company’s electronic connectors, medical products and other businesses. The results beat estimates by 1 cent. Sales rose 25% to $7.81 billion.

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Earnings Preview

A sampling of companies expected to report today, ranked by year-over-year earnings-per-share (EPS) growth, compiled by First Call/Thomson Financial.

Expected Today

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Ticker Analysts’ Year-ago Predicted Company symbol estimated EPS quarter pct. chg. Newmont Mining NEM $0.06 $0.02 +200% Amerada Hess AHC 2.52 0.90 +180 Norfolk Southern NSC 0.13 0.05 +160 Kerr-McGee KMG 2.33 1.27 +83 Tosco TOS 0.86 0.69 +25 Omnicom Group OMC 0.47 0.39 +21 PP&L; PPL 0.66 0.55 +20 American Electric Power AEP 1.07 0.90 +19 Anheuser-Busch BUD 0.56 0.49 +14 Interpublic Group IPG 0.24 0.21 +14 Sara Lee SLE 0.29 0.28 +4 Alltel AT 0.66 0.68 -3 Centex CTX 0.95 1.07 -11 DuPont DD 0.51 0.59 -14 Great Lakes Chemical GLK 0.49 0.59 -17 AT&T; T 0.36 0.54 -33 Viacom VIAB 0.00 0.23 -100 Clear Channel Comm. CCU -0.05 0.00 NM

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Notes: NM = not meaningful. A loss in any period makes percentage change not calculable.

Year-over-year growth and percentage changes are based on earnings-per-share figures and may differ from percentage changes based on total profit.

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