Bristol-Myers Squibb Co.'s (BMY) first-quarter profit jumped 16% on higher sales, which helped results top Wall Street's expectations.
The drug maker also trimmed its full-year adjusted earnings forecast by 5 cents to $2.10 to $2.20 a share, citing the impact of the government's health care reform, which is expected to offset strength in the company's underlying business. Several peers in recent weeks have already made similar outlook cuts.
Bristol-Myers has become smaller and more focused on drug development at a time when some of its rivals, including Pfizer Inc. (PFE), have taken a different track: getting bigger and diversifying beyond brand-name prescription drugs. Still, the company needs to expand its product lineup because it faces the loss of patent protection in 2012 for its top-selling anti-clotting drug, Plavix.
For the latest quarter, Bristol-Myers posted a profit of $743 million, or 43 cents a share, up from $638 million, or 32 cents a share, a year earlier. Excluding restructuring charges, litigation expenses and other items, earnings rose to 56 cents from 42 cents. The latest results also included a 3-cent charge related to the government's recently enacted health care reform.
Net sales jumped 11% to $4.81 billion, or 8% excluding changes in currency values.
Analysts surveyed by Thomson Reuters projected a profit of 51 cents on revenue of $4.74 billion.
Gross margin fell to 72.8% from 73%.
Sales of Plavix climbed 16%. Abilify, an antipsychotic treatment, saw a 4.8% increase. The product has quickly become Bristol's No. 2 seller and is crucial to its plan to reduce its dependence on Plavix.
Sales of Plavix remained strong despite a move by the U.S. Food and Drug Administration to add a boxed warning alerting doctors the drug doesn't work as well in some patients. Some options doctors are considering for affected patients include doubling the dose of Plavix, or seeking an alternative medication.
Shares closed Wednesday at $24.34.
-By John Kell, Dow Jones Newswires; 212-416-2480; john.kell@dowjones.com