Bristol-Myers Squibb Company (NYSE: BMY) – Q4 FY 2010 Earnings On January 27
Tuesday, January 25, 2011 3:19 PM

One of the largest pharmaceutical companies by total sales, Bristol-Myers Squibb Co. (NYSE: BMY) will report its fourth quarter results on January 27, 2011. In the last three quarters of FY 2010, BMY's reported EPS exceeded analysts' consensus estimates by margins in the range of 1.90 percent and 11.30 percent.

Bristol-Myers Squibb (BMY) is a global developer, licensor, marketer, and retailer of pharmaceuticals and related healthcare products. In the last few years, the company has executed its strategy to transform into a next generation biopharmaceutical company. As part of its strategy, the company has divested its non-pharmaceutical businesses, implemented its acquisition and licensing strategy, and executed its productivity transformation initiative.

BMY beats analysts' estimates, and reaffirms FY 2010 financial guidance

For the third quarter of FY 2010, BMY reported total sales of $4.79 billion compared to $4.78 billion reported in the third quarter of FY 2009. US healthcare reform had a 1.6% negative effect on its net sales in the third quarter. Gross margin as a percentage of net sales was 73.3% in the third quarter 2010 compared to 72.5% in the same period in 2009. The company reported third quarter GAAP net earnings from continuing operations of $949 million, or $0.55 per share, compared to $892 million, or $0.45 per share, for the same period in 2009.

The company expects its 2010 GAAP EPS in the range of $1.84 to $1.94 per share and its non-GAAP EPS in the range of $2.10 to $2.20 per share.

Acquisition of ZymoGentics, Inc.

During the fourth quarter, in October, BMY acquired ZymoGenetics, Inc., the Seattle-based biotech company with which the company had been collaborating on the development of pegylated-interferon lambda for the treatment of Hepatitis C infection since January 2009.

In the pharmaceutical industry, BMY competes with AstraZeneca (NYSE: AZN), Merck & Co. Inc. ((NYSE: MRK), and Pfizer Inc. (NYSE: PFE). In the last one year, AstraZeneca has reported earnings of $5.50 per share, on revenues of $33.60 billion. Merck & Co. reported earnings of 2.59 per share, on revenues of $43.99 billion. Pfizer Inc. has reported earnings of $0.76 per share, on revenues of $66.78 billion. On the other hand, BMY has reported earnings of $5.92, on revenues of $19.41 billion.

Bristol-Myers Squibb has a P/E of 4.37, which is lower against the industry's average P/E of 12.91. The company has a P/S ratio of 2.28 and quarterly revenue growth rate of 0.20 percent, compared to industry's P/S of 2.03 and average quarterly revenue growth rate of 10.50 percent.

Analysts' expects marginal comparative increase for Q4

For the fourth quarter ending December 31, 2010, analysts' EPS estimates range from a low of $0.42 to a high of $0.55 per share, compared to the consensus estimate of $0.48 or $0.47 per share earned for the same quarter a year ago. Analysts' revenue estimates for the fourth quarter range from a low of $4.88 billion to a high of $5.17 billion, compared to a consensus estimate of $5.05 billion or $5.03 billion reported in the same quarter a year ago. For the quarter ended December 31, 2010, the consensus EPS forecast has raised the EPS to current estimate of $0.48 per share, from $0.50 estimated 90 days ago.

Bristol-Myers Squibb Increases dividend for Q1 FY 2011

In fiscal 2009, company paid dividends at $1.25 per share or a total of $2.5 billion. On December, 14, 2010, the board of directors of Bristol-Myers Squibb Company declared a 3.1 percent increase in the company's quarterly dividend, beginning in the first quarter of FY 2011. The dividend increase will result in a quarterly dividend of $0.33 per share on the $0.10 par value common stock. The next quarterly dividend will be payable on February 1, 2011, to stockholders of record at the close of business on January 7, 2011. On July 2010, Bristol-Myers announced the commencement of $3 billion share repurchase program, reflecting its strong cash position.

In the last 52 weeks, the company's stock has been trading in the range of $22.24 and $28. In the last one year, Bristol-Myers Squibb's stock has gained 6.5 percent to settle at $25.83 on January 20, 2010. The technical indicators for the stock are mixed, however, acquisitions can help in the growth of Bristol-Myers. Based on the EPS estimates and key financial data, I see a one year target price of $26.50.



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