Lilly says generic competition hurts profit, sales

INDIANAPOLIS, Tue Jan 29, 2013 — Eli Lilly and Co. said on Tuesday that fourth-quarter profit fell as competition from generic drugs, particularly for its once top-selling schizophrenia drug Zyprexa, drove revenue lower.

The U.S. drugmaker earned $827 million, or 74 cents per share, down from $858 million, or 77 cents per share, a year earlier.

Excluding special items such as asset impairments and restructuring, Lilly earned 85 cents per share. Analysts, on average, expected 78 cents per share.

Revenue dropped by about 1 percent to $5.96 billion, but were above Wall Street expectations of $5.81 billion.

Zyprexa sales slid 49 percent to $385 million from $750 million a year earlier. The company said the sharp drop was partly offset by gains in sales of other drugs and its animal health products.

Lilly forecast that earning would increase this year by 13 percent to 17 percent to $3.82 to $3.97 per share, excluding special items, due to cost controls. Profit will benefit by 7 cents per share due to a research and development tax credit that was delayed until this year due to the late signing of federal legislation.

It predicted sales will be flat to a bit higher this year, in a range of $22.6 billion to $23.4 billion, despite expected generic competition in December for its $5-billion-a-year antidepressant Cymbalta.

Lilly has been battered over the past year by generic forms of Zyprexa. Besides the looming threat from Cymbalta generics, it is girding for copycat forms of its $1 billion-a-year Evista osteoporosis drug that are due to arrive in early 2014.

Cymbalta had sales of $1.42 billion in the fourth quarter, up 20 percent from a year earlier, and a total of $4.99 billion in 2012.

The company hopes to cushion the blow from generics with approvals of some of its 13 experimental drugs now in late-stage trials.

Chevron profit drops on lower oil output, maintenance

SAN RAMON, Calif., Fri Nov 2, 2012 – Chevron Corp. posted a 33 percent drop in quarterly earnings as maintenance exacerbated a steady decline in output from oil and natural gas wells over the past year and as a huge fire at one of the company’s California plants hit the refining business.

The second-largest U.S. oil company said on Friday that third-quarter net income had fallen to $5.25 billion, or $2.69 per share, from $7.83 billion, or $3.92 per share, a year earlier.

Increasing output has been a struggle for many big oil companies, including Exxon Mobil Corp and Royal Dutch Shell Plc. With oil and gas assets tightly controlled by the countries where they are located, the majors are left to drill in pricier regions on land and offshore.

Chevron’s third-quarter oil and gas production fell to 2.52 million barrels of oil equivalent per day from 2.60 million bpd a year earlier. On quarter-to-quarter basis, the production number fell for the third period in a row.

Earnings dropped 17 percent to $5.1 billion in the oil and gas production business and plunged 65 percent to $689 million in the refining, or downstream, operation.

JPMorgan “whale” loss cuts bank trading revenue

NEW YORK, Fri Sep 21, 2012 – JPMorgan Chase & Co.’s multibillion-dollar loss on a bloated derivatives portfolio led the way to a 73 percent decline in U.S. banking industry trading revenue, according to a new government report.

Trading revenue fell to $2 billion in the second quarter from $7.4 billion a year earlier, the Office of the Comptroller of the Currency said on Friday.

“It was clearly the highly publicized losses at JPMorgan Chase that caused the sharp drop in trading revenues,” Martin Pfinsgraff, deputy comptroller for credit and market risk, said in a statement from the OCC. Less demand from clients for trades was also a factor, he said.

Compared with the first quarter, trading revenue fell almost as much, by 69 percent, from $6.4 billion.

So far, JPMorgan has pegged its total loss on the trades at $5.8 billion, using public-company accounting standards and assigning part of the loss to the first quarter.

A London-based trader involved in the trades was known in the credit derivatives market as the “London whale” for the large size of the positions he took.

The OCC’s tally of industry results put JPMorgan’s second-quarter loss on the trades at $3.7 billion, which the regulator said had caused the bank to report an aggregate $420 million trading loss for the quarter. Accounting for bank regulations is different in some ways from that used in companies’ reports to shareholders.

The OCC report echoes similar data reported on Aug. 28 by the Federal Deposit Insurance Corp.

Retailers fare well in August, sales beat estimates

WASHINGTON, Thu Aug 30, 2012 – Most retailers, including Costco Wholesale Corp. and Limited Brands Inc., posted better-than-expected sales gains at existing stores in August, in what is expected to be a healthy month as parents and students wrapped up back-to-school purchases.

Analysts expected 19 retail chains to report a 2 percent rise in August sales at stores open at least a year, or same-store sales, according to Thomson Reuters I/B/E/S. Excluding drugstores, which do not put out their numbers until next week, same-store sales are expected to rise 4.1 percent.

Same-store sales are an important measure of retailer performance because they strip out the effects from store openings and closures.

Limited, which owns the Victoria’s Secret, Pink and Bath & Body Works chains, saw same-store sales rise 8 percent, well above analysts’ average view of 4.2 percent.

PepsiCo, Coke Enterprises beat Wall Street forecasts

NEW YORK, Thu Apr 26, 2012 – PepsiCo Inc. and Coca-Cola Enterprises reported higher-than-expected quarterly profits and stood by their full-year forecasts, helped by price increases on sodas.

Like most food and beverage companies, PepsiCo and Coke Enterprises raised prices to offset higher commodity costs. But those price increases can often hurt sales volume.

PepsiCo said net income was $1.13 billion, or 71 cents per share, in the first quarter, down from $1.14 billion, or 71 cents per share, a year earlier.

Excluding items, earnings were 69 cents per share, in line with management’s expectations, but 2 cents ahead of analysts’ estimates, according to Thomson Reuters I/B/E/S.

Net revenue rose 4 percent to $12.43 billion, driven by price increases. Currency exchange rates reduced revenue growth by 1 percentage point.

Volume rose 2 percent in the company’s Americas Foods unit as strength in Latin America offset declines at the North American units of Frito-Lay and Quaker Foods. The Americas Beverages unit’s volume fell 1 percent.

The company stood by its 2012 outlook, which calls for earnings to fall 5 percent from the $4.40 per share reported for 2011. PepsiCo expects net revenue growth in the low single-digit percentage range for this year.

For PepsiCo, 2012 is a transition year as it ramps up marketing, cuts thousands of jobs and streamlines its portfolio in a bid to improve performance, especially in its North American drink business.

The company has lagged Coca-Cola Co as even its flagship Pepsi-Cola has fallen to No. 3 among soft drinks in the United States, behind Coca-Cola and Diet Coke.

Also on Thursday, Coke Enterprises reported first-quarter earnings of 36 cents per share, topping the analysts’ average estimate of 33 cents, according to Thomson Reuters I/B/E/S.The company, which bottles Coca-Cola Co drinks in Europe, also affirmed its full-year forecast for earnings per share to rise about 10 percent.

UnitedHealth profit tops views as enrollment rises

MINNETONKA, Minn. ― UnitedHealth Group Inc. posted a higher-than-expected fourth-quarter profit on Thursday, helped by increased membership across its array of health plans.

The largest U.S. health insurer by market value also backed its 2012 earnings forecast, which includes the potential for a decline in profit but which many analysts have seen as conservative. Shares rose 1.4 percent.

“As the bellwether and first to report, UnitedHealth results bode well for managed care earnings season,” Goldman Sachs analyst Matthew Borsch said in a research note.

UnitedHealth’s quarterly net income rose to $1.26 billion, or $1.17 per share, compared with $1.04 billion, or 94 cents per share, a year earlier.

Analysts on average were expecting $1.04 per share, according to Thomson Reuters I/B/E/S.

Revenue rose 8 percent to $25.92 billion, about $230 million ahead of estimates.

“It was a solid fourth-quarter, nicely ahead of consensus,” Susquehanna Financial Group analyst Chris Rigg said. “I don’t think the results will be particularly surprising to the investment community.”

Membership increased to about 34.6 million, up 5 percent. The company reported gains in its Medicare plans for the elderly and Medicaid plans for low-income Americans, as well as in its commercial plans serving employers.

“Enrollment growth remained strong, across the board,” Leerink Swann analyst Jason Gurda said.

Wells Fargo reports higher fourth-quarters earnings

SAN FRANCISCO ― Wells Fargo & Co. reported higher fourth-quarter earnings as the bank set aside less money to cover bad loans.

The fourth-largest U.S. bank by assets said it earned 73 cents per share. The average estimate from analysts was 72 cents per share, according to Thomson Reuters I/B/E/S.

Net income applicable to common shareholders was $3.89 billion, compared with $3.2 billion, or 61 cents per share, a year earlier.

The San Francisco-based bank recorded a loan-loss provision of about $2 billion, which was down from about $3 billion a year earlier. For the seventh straight quarter the bank reversed reserves the bank had previously booked for bad loans.

The bank’s total loans increased about $9.5 billion from the end of September to $769.6 billion at the end of December. The loan growth mirrored a trend shown when JPMorgan Chase & Co (JPM.N) reported earnings on Friday.

Wells Fargo said it purchased 27 million shares of its common stock in the fourth quarter, plus an additional 6 million shares through a transaction that will settle in the first quarter of this year.

“I’m extremely pleased with Wells Fargo’s performance in 2011 – including strong deposit and loan growth, record cross-sell and record earnings,” CEO Jon Stumpf said in a statement.

Macy’s posts higher third-quarter net, raises full-year outlook

NEW YORK ― Macy’s Inc. reported a higher third-quarter profit, helped by sales gains on its website and at its upscale Bloomingdale’s chain, and the retailer raised its profit forecast for the fiscal year.

Macy’s raised its profit per share forecast for the current year 10 cents to a range of $2.70 to $2.75, and expects $1.52 to $1.57 of that to come in the holiday quarter.

Macy’s, which also owns the upscale Bloomingdale’s chain, reported net income of $139 million, or 32 cents a share, for the quarter that ended Oct. 29, compared with $10 million, or 2 cents a share, a year earlier.

The department store operator reaffirmed its sales forecast and still expects same-store sales, or sales at stores open at least a year, to rise between 4 percent and 4.5 percent in the current holiday season quarter.