Job cuts propel Wyeth earnings down 6.3%

MADISON, N.J.- Wyeth said Wednesday its second-quarter profit fell 6.3 percent on charges for severance and other costs related to ongoing job cuts, but the drug developer still topped Wall Street expectations and raised its full-year outlook.

The company, which employees about 5,300 people in Collegeville, Montgomery County, said it's profit fell to $1.12 billion, or 83 cents per share, in the April-June period, compared with profit of $1.2 billion, or 87 cents per share, during the same period a year earlier.

But excluding a $155.2 million charge primarily for work force reductions and employee severance, the company said it earned 91 cents per share. That was above the 87 cents that analysts surveyed by Thomson Financial had expected. The estimates typically exclude onetime items.

Revenue rose 5 percent to $5.95 billion from $5.65 billion a year ago. Analysts expected revenue of $5.69 billion.

"We are pleased with the volume growth we experienced internationally which was enhanced by foreign exchange rates, and continue to build upon the strength of our biotech products Enbrel and Prevnar, as well as our growing nutritional franchise," Bernard Poussot, chairman, president and chief executive, said in a statement.

Wyeth now expects full-year profit between $3.47 and $3.55 per share, excluding charges, a boost from prior guidance of $3.35 to $3.49 per share. Analysts expect profit of $3.45 per share.

The company has been grappling with charges for job cuts. During the most recent quarter, it had $155.2 million in costs for those cuts as it continues trimming personnel who had worked on selling and marketing Protonix. The heartburn drug started facing generic competition earlier this year when Teva Pharmaceutical Industries Ltd., which employs 1,500 at four locations in the Philadelphia suburbs, challenged the patent and launched its own version.

Protonix was the only drug that experienced a sales decline during the quarter. The antidepressant Effexor was Wyeth's most lucrative drug, with sales rising 5 percent to just over $1.02 billion. Prevnar, a children's vaccine, gained 9 percent to reach $691 million, while sales of the arthritis drug Enbrel rose 36 percent to $692 million outside of the U.S. and Canada.

Wyeth received $284 million from its partnership with Amgen Inc. on Enbrel sales in the U.S. and Canada.

In all, sales of pharmaceutical products rose 5 percent to just under $4.97 billion, while consumer health-care products, which include Centrum and Advil, rose 7 percent to $665 million. Sales of animal health products rose 12 percent to $313 million.

For the six months ended June 30, the company earned $2.32 billion, or $1.72 per share, compared with profit of $2.45 billion, or $1.79 per share, during the same period a year prior. Revenue rose to $11.66 billion from $11.02 billion.