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UPJOHN REPORTS RECORD SALES IN SECOND QUARTER; SIX-MONTH SALES UP 5 PERCENT; HUMAN HEALTH CARE SALES UP 16 PERCENT IN QUARTER

 KALAMAZOO, Mich., July 19 /PRNewswire/ -- The Upjohn Company (NYSE: UPJ) today reported increases in sales, operating income and net earnings for the second quarter and first six months of 1993. Record second-quarter sales of $915 million increased 4 percent over 1992. Sales growth was led by human health care products, which posted strong volume gains, increasing 16 percent in the second quarter and 8 percent for the first six months of 1993. New U.S. prescription pharmaceutical products and product line extensions accounted for 46 percent and 87 percent of U.S. human health care sales growth, respectively, for the quarter and first six months.
 Quarterly net earnings were $125 million, compared to $124 million in the second quarter of 1992. Second-quarter primary earnings per share were 70 cents, compared to 69 cents in 1992. Prior-year second- quarter results were favorably affected by the recovery of past losses from a pharmaceutical joint venture recorded as operating income and gains on the sale of a non-operating investment and real estate. Excluding these items from year-to-year comparisons results in an increase in 1993 second-quarter primary earnings per share of 8 cents as shown in the table below.
 Financial highlights listed below are in millions of dollars (except per-share amounts). Data presented for 1992 reflects restatements related to the adoption of new accounting principles in the fourth quarter.
 Second Quarter
 Ended June 30, 1993 1992 Percent change
 Net sales $915 $884 4
 Earnings before tax 164 163 1
 Earnings before tax excluding
 non-recurring items 164 144 14
 Primary earnings per share $.70 $.69 1
 Primary earnings per share
 excluding non-recurring
 items $.70 $.62 13
 For the first six months of 1993, earnings before accounting changes were $278 million, an increase of 6 percent on sales of $1.8 billion.
 Six Months
 Ended June 30, 1993 1992 Percent change
 Net sales $1,848 $1,755 5
 Earnings before accounting
 changes 278 261 6
 Primary earnings per share
 before accounting changes $1.55 $1.45 7
 Commenting on the company's results, President and Chief Operating Officer Ley S. Smith said: "We are pleased with our solid performance in the second quarter. Our human health care business achieved excellent results as new pharmaceutical products introduced in the last 15 months made significant contributions to sales growth. Our strategic plan is on course and working. We will continue to maintain a strong investment in product development; emphasize cost control programs; concentrate our efforts on core business strengths; and remain a flexible organization able to adapt quickly to a changing customer base."
 Consolidated U.S. sales for the quarter were $563 million, up 3 percent from a year ago. Non-U.S. sales of $352 million were up 5 percent and amounted to 39 percent of consolidated sales.
 Operating income of $163 million was up 8 percent from the second quarter of 1992 and amounted to 18 percent of sales. Excluding the receipt of $9.5 million for recovery of past losses from a pharmaceutical joint venture recorded in the second quarter of 1992, operating income increased 15 percent in second-quarter 1993. Cost of products sold decreased to 27 percent of sales from 29 percent in the year-earlier quarter due to a change in product mix. Marketing and administrative costs decreased to 38 percent of sales, compared to 39 percent in the second quarter of 1992, as a result of continued emphasis on cost controls. Research and development expense increased to 18 percent from 15 percent of sales. Accelerated clinical testing of Freedox, the lazaroid compound being tested for the treatment of head injury, spinal cord injury, subarachnoid hemorrhage and ischemic stroke; anti-AIDS compounds; alprostadil, for erectile dysfunction; and several central nervous system compounds continued.
 Earnings before tax were $164 million, compared to $163 million in the second quarter of 1992. In addition to the $9.5 million non- recurring item recorded as operating income in 1992, prior-year earnings before tax were favorably affected by gains of $9.9 million on the sale of a non-operating investment and real estate. Excluding these non- recurring items from year-to-year comparisons results in an increase in second-quarter 1993 earnings before tax of 14 percent.
 The estimated annual effective tax rate for 1993 is 24 percent, the same rate as applied to second-quarter earnings in 1992.
 HUMAN HEATH CARE
 Worldwide sales of human health care products increased 16 percent over second-quarter 1992 levels. New products introduced in the U.S. since the first quarter of 1992 contributed more than 7 percent of U.S. sales in the second quarter of 1993. These products include Vantin, the broad-spectrum oral antibiotic; Glynase, the oral antidiabetes agent, and Depo-Provera, the injectable contraceptive. Sales of antibiotics; the oral antidiabetes agent Micronase; the anti-anxiety agent, Xanax; and the progestational agent, Provera, also contributed to the sales growth. Sales of Rogaine, the treatment for hair loss, were up significantly, due to purchase incentives offered in the U.S. Worldwide sales of the sleep medication, Halcion, rose slightly in the second quarter.
 Sales of Ansaid, the nonsteroidal anti-inflammatory agent remained down in the second quarter of 1993, due to competitive pressures and a shift in sales force detailing efforts to support new products.
 Sales of nonprescription drugs Motrin IB, the internal analgesic; Cortaid, the anti-itch medication; and Dramamine, the motion sickness medication, also contributed to sales growth.
 Human health care sales outside the U.S. were up 11 percent, reflecting increased sales of the antibiotic Dalacin (Cleocin), Xanax and Solu-Medrol, the injectable steroid. Good sales increases were realized in Italy, Latin America and developing markets in Central Europe and Asia.
 A strong human health care performance more than offset a significant decline in agricultural operating profit.
 AGRICULTURAL
 Despite increased animal health sales, worldwide agricultural sales decreased 32 percent in the second quarter, compared to prior-year levels. Year-to-date agricultural sales were down 6 percent. In the second quarter of 1993, agronomic and vegetable seed sales decreased significantly, more than offsetting the increase in animal health sales. Seed sales were unfavorably affected by a recent change in agronomic seed distribution systems in the U.S., and a switch to calendar versus fiscal year accounting which had the effect of shifting some sales into the first quarter. Agronomic seed sales were also depressed as a result of weak corn sales in the U.S. and a continued reduction in soybean acreage in Italy. Vegetable seed sales were hurt by weak demand in the U.S. processor industry. Animal health sales were led by a strong performance from Naxcel, the antibiotic. Lutalyse, the fertility- control agent, and MGA, the feed additive also contributed to sales growth in the animal health area.
 The Upjohn Company is a worldwide, research-based provider of human health care products, animal health products, agronomic and vegetable seeds and specialty chemicals. Headquartered in Kalamazoo, the company has been dedicated to improving health and nutrition for more than a century.
 THE UPJOHN COMPANY and subsidiaries report for the quarter and six months ended June 30, 1993 (unaudited; amounts in thousands, except per- share data):
 CONSOLIDATED STATEMENTS OF EARNINGS
 Second Quarter Six Months
 1993 1992 1993 1992
 Net sales $914,869 $883,571 $1,847,527 $1,755,443
 Other revenue 8,897 8,969 14,839 12,936
 Operating revenue 923,766 892,540 1,862,366 1,768,379
 Cost of products sold 244,026 258,206 508,951 495,114
 Research & development 166,006 136,540 316,056 272,801
 Marketing & administrative 350,491 346,213 690,034 671,257
 Operating income 163,243 151,581 347,325 329,207
 Interest income 13,453 13,440 26,747 27,205
 Interest expense (9,383) (8,115) (18,107) (14,941)
 Foreign exchange losses (326) (490) (2,191) (1,519)
 All other, net (2,541) 6,828 9,844 4,769
 Earnings before income
 taxes, accounting changes
 and minority equity 164,446 163,244 363,618 344,721
 Provision for income taxes 39,500 39,100 87,300 82,700
 Minority equity in (losses)
 earnings (336) 289 (1,333) 545
 Earnings before cumulative effect
 of accounting changes 125,282 123,855 277,651 261,476
 Cumulative effect of
 accounting changes
 (net of tax) (7,791) (222,895)
 Net earnings 125,282 123,855 269,860 38,581
 Dividends on preferred
 stock 3,081 3,036 6,122 6,020
 Net earnings on common
 stock $122,201 $120,819 $263,738 $ 32,561
 Earnings per common share:
 Primary -Earnings before
 accounting changes $0.70 $0.69 $1.55 $1.45
 -Cumulative effect of
 accounting changes (.04) (1.26)
 -Net earnings 0.70 $0.69 $1.51 $0.19
 Fully -Earnings before
 Diluted accounting changes $0.68 $0.67 $1.51 $1.41
 -Cumulative effect of
 accounting changes (.04) (1.21)
 -Net earnings $0.68 $0.67 $1.47 $0.20
 -0- 7/19/93
 /CONTACT: John P. Lambrechts, 616-323-7076, or investors, Barbara L. Guinness, 616-323-5918, both of Upjohn/
 (UPJ)


CO: The Upjohn Company ST: Michigan IN: MTC SU: ERN

ML -- DE001 -- 2870 07/19/93 08:24 EDT
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Date:Jul 19, 1993
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