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SCHERING-PLOUGH HEALTHCARE SALES RISE 4% IN THIRD QUARTER

This article was originally published in The Tan Sheet

Executive Summary

SCHERING-PLOUGH HEALTHCARE SALES RISE 4% IN THIRD QUARTER led by the foot care and sun care product categories. Schering cited Lotrimin AF and Tinactin antifungal lines for the increase in foot care product sales. The company noted, however, that sales of OTC products were "lower due to increasingly competitive markets for vaginal antifungal" products. Private label competitors to Schering-Plough's Gyne-Lotrimin vaginal antifungal are just beginning to enter the market. Overall, Schering-Plough corporate sales in the third quarter increased 4% to $ 1.06 bil., while nine-month sales of $ 3.27 bil. are 7% ahead of the company's 1992 sales pace. Excluding the effects of foreign currency exchange, Schering said that third- quarter sales would have advanced 8% and nine-month sales would have grown 9%. Net income increased 14.3% in the third quarter to $ 199.4 mil. However, due to a one-time accounting charge taken in the first quarter, net income through the first nine months of 1993 slipped 1.9% to $ 541.9 mil. However, excluding the effects of the one-time $ 94.2 mil. accounting charge, net income would have increased over 15% during the nine-month period ended Sept. 30. Procter & Gamble first-quarter net earnings advanced 10% to $ 670 mil. excluding the effects in the earlier quarter of accounting and restructuring charges. Charges in last year's quarter included $ 925 mil. for the accounting changes and an after-tax reserve of $ 200 mil. for the divestiture of the company's 100% juice business. P&G attributed the increase in earnings to "strong unit volume growth in the U.S. and international, lower costs that more than offset the impact of lower pricing, and lower interest costs." As previously announced, first-quarter worldwide unit volume was up 6%, excluding discontinued pulp and juice operations ("The Tan Sheet" Oct. 27, p. 27). The company also pointed out that "less favorable foreign exchange rates significantly held back the growth in earnings." The firm noted that on a constant exchange basis, net earnings would have been up 17% from comparable earnings last year. Despite the unit volume gain, worldwide sales for the period declined 4% to $ 7.56 bil. The sales decrease reflects adverse foreign exchange rates and divestitures, primarily of the pulp business, P&G said. Excluding exchange rates and divestitures, sales would have been up 5%, according to the firm. Commenting on the recent figures, P&G Chairman Edwin Artzt explained that "despite challenging market conditions in many parts of the world, the quarter produced broadly based volume growth by sector and geography, with good balance between established and new brands." Artzt also noted that "several new brand initiatives have been productive," including the "global expansion of hair care and feminine protection products and the U.S. expansion of Olay Beauty Bar."
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