Bristol-Myers Squibb (BMY, Financial) is a global biopharma company whose mission and vision is to manufacture, distribute, market and deliver drugs and medicines to patients with serious diseases.
Its medicines are used across the world to combat diseases as cancer, cardiovascular disease, hepatitis B and hepatitis C, HIV/AIDS and rheumatoid arthritis. It is recognized among the leading sustainability-driven companies.
The company recently reported a strong second quarter, marked by strong sales and earnings. This growth was driven by Immuno-Oncology and business development transactions, diversified businesses and focused approach. The company raised its GAAP and non-GAAP EPS range.
Second Quarter Results
Revenues during the quarter were $4.9 billion, which marked an increase of 17% from $ 4.1 billion in the prior year quarter. Global revenues increased by 18% adjusted for foreign exchange impact.
U.S. revenues increased by 46% and were $2.7 billion in the quarter, which was $1.8 billion in the prior year quarter.
International revenues decreased 6%, primarily from lower hepatitis C franchise sales in Japan and France.
Gross margin as a percentage of revenues was 75.2% in the quarter, which was 75.7% in the prior year quarter.
Marketing, selling and administrative expenses increased by 9% and were $1.2 billion in the quarter, which was $1.1 billion in the prior year quarter.
Research and development expenses decreased by32% and were $1.3 billion in the quarter, which was $1.9 billion in the prior year quarter.
The effective tax rate was 26.4% in the quarter.
The company reported net earnings attributable to Bristol-Myers Squibb of $1.2 billion, or 69 cents per share, in the quarter (which was a net loss of $130 million, or eight cents per share, in the prior year quarter).
The company reported non-GAAP net earnings attributable to Bristol-Myers Squibb of $1.2 billion, or 69 cents per share, in the second quarter, (which was $890 million, or 53 cents per share, during the prior year quarter).
Cash, cash equivalents and marketable securities were $7.9 billion, with a net cash position of $1.2 billion, as of June 30.
Dividends
The company declared a quarterly dividend of 38 cents per share on the 10 cent par value Common Stock of the corporation. The next quarterly dividend will be payable on Nov. 1, to stockholders of record at the close of business on Oct. 7.
The directors also declared a quarterly dividend of 50 cents per share on the $2.00 Convertible Preferred Stock of the corporation, payable Dec. 1, Â to stockholders of record at the close of business on November 8.
Expectations for 2016
| Â | Range |
| GAAP EPS | To range between $2.43 - $2.53 |
| Non-GAAP EPS | To range between $2.55 - $2.65 |
| Effective tax rate | To be around 22% |
Initiatives
- The company undertook $150 million program to help confront HIV/AIDS in Africa.
- It is also developing new, innovative programs to help patients with cancer, hepatitis B and hepatitis C.
- It is providing free medications to qualifying patients with financial hardship in the U.S. through the patient assistance programs.
(Source: Company’s Website)
Strong Attributes of the Company
- Brand reputation
- Solid balance sheet
- Free cashflows
- Top line growth
- Constant innovation
My Takeaway
Bristol-Myers Squibb is a great company with significant growth potential. The company is concentrating its resources to give its very best to the customers. Over the years, it has been consistent in returning dividends (considered amongst the best in the industry) and has been paying them for more than 300 consecutive quarters.
The year 2015 was a remarkable year for BMY as it delivered $16.6 billion in sales. The company strengthened to a diversified portfolio of medicines. The company plans to transform cancer care with its innovative medicines.
At present, it is outperforming most of its peers and is committed to deliver value to its shareholders. With an R&D that is amongst the best in the industry, we can expect more innovative alliances and partnerships in the future.
The investment the company made in the Immuno-Oncology segment is already paying off. It is emphasising on targeted diversification, both as a short and long-term strategy. It is getting stronger and I think that adding this company will reap shareholder returns.
Disclosure: I do not hold any position in the company.
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