10-QPeriod: Q1 FY2014

BRISTOL MYERS SQUIBB CO Quarterly Report for Q1 Ended Mar 31, 2014

Filed April 29, 2014For Securities:BMYCELG-RIBMYMP

Summary

Bristol-Myers Squibb (BMY) reported solid first-quarter 2014 results, demonstrating resilience and strategic execution. Total revenues slightly declined by 1% year-over-year to $3.81 billion, primarily impacted by the strategic divestiture of the diabetes business. However, operational efficiency improved, leading to a significant increase in Net Earnings Attributable to BMS by 54% to $937 million, or $0.56 per diluted share, up from $609 million, or $0.37 per share, in the prior year. This profit growth was driven by a substantial decrease in total expenses, notably from the exclusion of the divested diabetes business and other cost-saving measures. The company successfully completed the sale of its diabetes business to AstraZeneca in February 2014, recognizing a gain on sale and streamlining its focus towards core therapeutic areas like oncology, virology, and immunology. This strategic move, coupled with prudent cost management, significantly boosted profitability. The company also highlighted progress in its pipeline, with key developments in immuno-oncology and other therapeutic areas, signaling a commitment to future growth and innovation. Overall, BMY delivered a strong operational and financial performance, underscoring its strategic transformation and focus on high-value growth opportunities.

Financial Highlights

56 data points
Beta

Revenue

$3.81B

74.6% Gross Margin

Net Income

$937.00M

24.6% Net Margin

EPS (Diluted)

$0.56

Total Assets

$33.42B

Cash & Equivalents

$5.22B

Free Cash Flow

$499.00M

Financial Statements
Beta
Revenue$3.81B
Cost of Revenue$968.00M
Gross Profit$2.84B
R&D Expenses$946.00M
SG&A Expenses$957.00M
Operating Expenses$2.83B
Interest Expense$54.00M
Net Income$937.00M
EPS (Basic)$0.57
EPS (Diluted)$0.56
Shares Outstanding (Basic)1.65B
Shares Outstanding (Diluted)1.67B

Key Highlights

  • 1Net Earnings Attributable to BMS increased by 54% to $937 million ($0.56 per diluted share) in Q1 2014, up from $609 million ($0.37 per diluted share) in Q1 2013.
  • 2Total Revenues slightly decreased by 1% to $3.81 billion, primarily due to the February 2014 divestiture of the diabetes business to AstraZeneca.
  • 3Total Expenses decreased by 10% to $2.83 billion, significantly benefiting from the exclusion of the divested diabetes business and other cost control measures.
  • 4The company recognized a $259 million gain on the sale of its diabetes business to AstraZeneca, contributing to the improved profitability.
  • 5Cash, cash equivalents, and marketable securities increased substantially to $10.62 billion from $8.27 billion at the end of 2013, boosted by proceeds from the divestiture.
  • 6Key products like Sprycel (dasatinib) and Yervoy (ipilimumab) showed strong double-digit revenue growth, indicating positive momentum in the oncology portfolio.
  • 7The company advanced its pipeline with new drug application submissions and breakthrough therapy designations, particularly in Hepatitis C and oncology (nivolumab).

Frequently Asked Questions

The divestiture of the diabetes business to AstraZeneca in February 2014 significantly impacted BMY's financials. While it led to a slight decrease in total revenues (down 1% to $3.81 billion), it substantially reduced total expenses (down 10% to $2.83 billion) and contributed to a significant increase in net earnings. The company also recognized a $259 million gain on the sale of this business, boosting overall profitability.

BMY's profitability saw a substantial improvement, with Net Earnings Attributable to BMS increasing by 54% to $937 million, or $0.56 per diluted share, compared to $609 million, or $0.37 per diluted share, in the prior year's quarter. This was driven by a sharp reduction in total expenses, primarily due to the exclusion of the divested diabetes business, alongside effective cost management initiatives and a gain from the sale of the diabetes business.

Key growth drivers include strong performance from oncology products like Sprycel and Yervoy, which showed double-digit revenue growth. The cardiovascular drug Eliquis also saw continued increases in revenue post-launch. In terms of pipeline development, BMY is advancing its immuno-oncology efforts with nivolumab, has submitted new drug applications for its Hepatitis C regimen, and is focusing on therapeutic areas such as oncology, virology, and immunology.

BMY's cash position strengthened significantly, with cash, cash equivalents, and marketable securities rising to $10.62 billion from $8.27 billion at the end of 2013. This increase was largely fueled by the $3.3 billion in cash received from the sale of the diabetes business. The company maintains access to substantial revolving credit facilities and believes its current liquidity and cash flow are sufficient to meet its obligations and fund ongoing operations and strategic initiatives.