Friday, October 17, 2008

Come Tuesday -- the Schering Story will be "Earnings Quality" -- or, the lack of it.


I'll live-blog the earnings call here, on Tuesday Monday morning -- before market-open, so do return then. . . but here are some (educated) guesses. . . .



A significant portion of the third quarter 2008 Schering-Plough earnings are likely to have been derived from sources that lack "quality" -- that is, they are likely to chiefly come from non-repeating sources -- special, one-time gains, on currencies, for example (the trend-line on which have reversed, and sharply, since the third quarter closed), and one-time pull-throughs from cutting heads -- some 4,000 in the third quarter alone.

I noted with interest how prominent consumer health and currencies were in JNJ's earnings just announced, and the relative decline in pharma profitability -- so, I'd look for much of the quarter's "earnings growth" to be due to currency exchange rates, not actual organic drug product sales growth (even internationally, where about 60 percent of all Schering's sales occur -- but far less profit) -- I'd also look for the Cholesterol Franchise to continue its year-long fainting-spell. . . . The current Q3 EPS consensus target?

. . . .Consensus Wall Street Analysts' estimeates are for EPS of $0.31 per fully-diluted share. . .
Will Schering beat it, or come in a penny under? I guess we'll have to wait and see.

See you, here, bright and early, on Tuesday -- now remember, too that Merck will report on Wednesday, before market open -- Yep -- I'll cover that, as well. So, expect a busy start for the week.

2 comments:

Anonymous said...

Did you go to the Investor's page on the company website.

Vytorin and Zetia scrips are down.

Condor said...

Yep -- making a graphic for it, now. Thanks!