AHP Profit Up 17%; Other Drug Firms Lag

Three of the nation’s largest drug makers posted lower or lackluster earnings Thursday, hurt by generic competition for key drugs and plant problems, while American Home Products Corp. bucked the trend with robust results.

Madison, N.J.-based American Home is one of the few major U.S. drug firms not facing generic competition for key drugs--a blessing not shared by rivals Bristol-Myers Squibb Co., Eli Lilly & Co. and Schering-Plough Corp.

Likewise, companies that are having to scramble to fix manufacturing problems, such as Schering-Plough and Eli Lilly, are suffering lower profit margins that hurt earnings.

American Home reported fourth-quarter profit rose 17% before special items, boosted by soaring sales of its antidepressant drug Effexor and its Premarin female hormone replacement medicines.

Operating profit rose to $823 million, or 62 cents a share, from $704 million, or 53 cents, in the year-earlier quarter, which excluded huge charges for settling the liability claims of thousands of former users of its diet drugs.

AHP shares closed down 16 cents to $64.37 on the New York Stock Exchange, after a Food and Drug Administration advisory panel rejected a new treatment regimen for the company’s kidney transplant drug Rapamune.

For Bristol-Myers, slowing sales of once-key drugs BuSpar and Taxol--both of which recently lost patent protection--dragged on results. The company reported a 9% rise in operating profit.

Net profit rose to $1.5 billion, or 75 cents a share, as sales rose 10% to $5.3 billion. But excluding drugs from the recent acquisition of DuPont Co.’s pharmaceuticals unit, sales rose only 3%.

Bristol-Myers shares fell $2.53 to close at $46.85 on the NYSE.

Indianapolis-based Eli Lilly, struggling to rebound from the loss last year of U.S. patent protection on antidepressant Prozac, its flagship drug, saw its operating earnings fall 14%.

Lilly said it earned $656 million before one-time items, or 60 cents a share, matching Wall Street forecasts. Lilly also projected first-quarter earnings at 56 cents to 58 cents a share, below analysts’ predictions of 61 cents.

Sales at Lilly fell 5% in the quarter to $2.8 billion because of a dramatic 66% drop in Prozac’s sales. Lilly’s shares fell $1.67 to $74.10 on the NYSE.

Schering-Plough posted an 8% drop in operating profit for the period, but profit fell by 74% after a $500-million provision for a potential payment to U.S. regulators to clear up manufacturing problems at its plants.

The Kenilworth, N.J.-based drug maker reported net income of $143 million, or 10 cents a share, compared with $571 million, or 39 cents, a year earlier.

The company’s fourth-quarter net sales edged up 2% to $2.5 billion, but U.S. pharmaceutical sales fell 6%, hurt by generic competition and manufacturing issues.

Schering-Plough shares lost 40 cents to close at $33.45 on the NYSE.

Other company earnings, excluding one-time gains and charges unless noted:

* Eastman Kodak Co., the No. 1 maker of photographic film, reported a fourth-quarter net loss of $206 million, or 71 cents a share, contrasted with net profit of $194 million, or 66 cents, a year earlier. Excluding charges totaling $262 million, or 90 cents a share, for a previously announced restructuring and other nonrecurring items, and an income tax benefit of $20 million, or 7 cents a share, earnings for the fourth quarter were $36 million, or 12 cents a share. In the year-earlier quarter, excluding a charge of 2 cents a share related to the exit of a manufacturing facility, earnings were $200 million, or 68 cents a share. The Rochester, N.Y.-based company said fourth-quarter sales fell 6% to $3.36 billion.

* Euro Disney, 39% owned by Walt Disney Co., said first-quarter sales rose 1.8% to $198 million, reflecting an increase in guest spending on food and merchandise.

* McDonald’s Corp.’s profit fell for the fifth straight quarter as the largest restaurant chain was hurt by job-cutting expenses in the U.S., higher food costs and declining sales in Latin America and Asia. Fourth-quarter net income fell 40% to $271.9 million, or 21 cents a share, from $452 million, or 34 cents, a year earlier. The Oak Brook, Ill.-based company said sales rose 5.1% to $3.77 billion from $3.59 billion.

* R.J. Reynolds Tobacco Holdings Inc., the maker of Camel and Winston cigarettes, said fourth-quarter net income fell 11% as interest income declined. Net income fell to $89 million, or 93 cents a share, from $100 million, or 99 cents, a year earlier. The Winston-Salem, N.C.-based company said sales rose 4% to $2.09 billion.

* Tribune Co., the Chicago-based publisher of the Los Angeles Times, said fourth-quarter earnings before special items fell 45%, reflecting a severe advertising recession. The company earned $69 million, or 21 cents a share, excluding one-time items, compared with $124.4 million, or 36 cents, a year ago. Revenue declined 13% to $1.32 billion. Revenue from publishing, which accounts for the vast majority of the company’s revenue, fell 10% on a pro forma basis. Television revenue fell 14%.