Wyeth 2Q profit falls on charges but beats views

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.

Overseas markets helped drive growth for the company, which is seeing international sales making up the majority of its revenue for the first time in its history.

The company'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 one-time items.

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

"At Wyeth, we continue to focus on products that have the potential to transform our company and medicine as a result," Chairman, President and Chief Executive Bernard Poussot said in a conference call.

During the quarter, the company continued its push to position itself for growth in emerging markets, including China, and for the first time in company history has seen the bulk of its revenue come from international sales. Poussot said 54 percent of revenue came from outside the U.S. in the first half of the year.

Meanwhile, 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.

Wall Street gave the results and outlook a positive view, though some are still somewhat cautious as the company moves forward with a cost-cutting plan.

"We are encouraged by the performance, however, fundamentally, we see downside pressure on Wyeth's long-term growth rate from generic exposure, risks, and pipeline delays," said Citi analyst John Boris, in a note to investors.

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. 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.

Wyeth shares rose 87 cents, or 2 percent, to $45.55 Wednesday. The stock has traded between $38.39 and $54.91 over the last 52 weeks.