10-QPeriod: Q1 FY2009

BRISTOL MYERS SQUIBB CO Quarterly Report for Q1 Ended Mar 31, 2009

Filed April 28, 2009For Securities:BMYCELG-RIBMYMP

Summary

Bristol-Myers Squibb Company (BMY) reported its first-quarter 2009 financial results, showcasing a 3% increase in net sales to $5.015 billion, driven by strong performance in key products like ABILIFY* and PLAVIX*. Despite a 5% unfavorable foreign exchange impact, the company saw growth in its BioPharmaceuticals segment, which accounted for 86% of net sales, while its Mead Johnson nutrition segment experienced a slight decline. Net earnings from continuing operations attributable to shareholders decreased by 3% to $638 million, or $0.32 per diluted share, compared to $661 million in the prior year. This decline was influenced by increased litigation expenses, notably a $100 million reserve for securities litigation, and higher research and development costs related to new collaborations. The company also highlighted progress on its Productivity Transformation Initiative (PTI), aiming for significant cost savings, and the successful completion of Mead Johnson's initial public offering (IPO), which provided $782 million in net proceeds. BMY's financial position remained robust, with substantial working capital and cash reserves.

Financial Highlights

28 data points
Beta

Revenue

$4.32B

73.0% Gross Margin

Net Income

$638.00M

14.8% Net Margin

EPS (Diluted)

$0.32

Cash & Equivalents

$7.83B

Free Cash Flow

$251.00M

Financial Statements
Beta
Revenue$4.32B
Cost of Revenue$1.17B
Gross Profit$3.16B
R&D Expenses$908.00M
SG&A Expenses$901.00M
Operating Expenses$3.13B
Operating Income$649.00M
Net Income$638.00M
EPS (Basic)$0.32
EPS (Diluted)$0.32

Key Highlights

  • 1Net sales increased by 3% to $5.015 billion, primarily driven by strong performances from ABILIFY* (+30%) and PLAVIX* (+10%).
  • 2Net earnings attributable to shareholders declined by 3% to $638 million ($0.32 diluted EPS) from $661 million ($0.33 diluted EPS) in the prior year.
  • 3The company incurred significant litigation expenses, including a $100 million reserve for securities litigation, impacting profitability.
  • 4Mead Johnson's initial public offering (IPO) in February 2009 generated $782 million in net proceeds, strengthening the company's liquidity.
  • 5Research and development expenses increased by 18% due to new licensing and upfront payments for collaborations with ZymoGenetics and Nissan.
  • 6The Productivity Transformation Initiative (PTI) is on track to deliver significant cost savings, with improved gross margins and lower operating expenses as a percentage of sales.
  • 7The company continues to invest in its BioPharmaceuticals segment, focusing on key growth products and pipeline development.

Frequently Asked Questions

The primary driver of the net sales increase was the strong performance of key products, notably ABILIFY*, which saw a 30% increase in sales, and PLAVIX*, which increased by 10%. Other contributing products included ORENCIA, SPRYCEL, and the company's virology portfolio.

The decrease in net earnings was primarily due to higher litigation expenses, including a $100 million reserve for securities litigation, and increased research and development spending related to new collaborations. These factors offset the benefits from increased sales and improved gross margins.

The Mead Johnson IPO, completed in February 2009, provided Bristol-Myers Squibb with $782 million in net proceeds, significantly increasing its cash and cash equivalents and strengthening its overall financial position and liquidity. Bristol-Myers Squibb retained an 83.1% interest in Mead Johnson.

The company faces ongoing litigation, particularly concerning PLAVIX* patent challenges and associated legal expenses. Additionally, there is an ongoing SEC investigation into certain German subsidiaries and a securities litigation for which a $100 million reserve was established. The company also faces investigations related to ABILIFY* marketing practices.