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Bristol-Myers To Restate Earnings

Oct 24, 2002 | AP Bristol-Myers Squibb Co. said Thursday it will restate earnings downward for parts of 2000 and 2001 while revising this year's earnings upward because of its massive inventory backlog imbroglio that spurred two government investigations.

Analysts had been expecting the move since last April when the company announced that an inventory glut caused by incentives to wholesalers would slash this year's earnings by up to 50 percent. The announcement pushed both the Securities and Exchange Commission and the U.S. Attorney's Office in New Jersey to investigate whether Bristol-Myers improperly inflated its revenues through those incentives.

The company said it will reallocate more than $2 billion in sales revenue and earnings equal to 61 cents a share. Bristol-Myers said it was preparing the restatement but no timetable was given for its completion.

"Restating will help put the inventory issue behind us as soon as possible and allow us to move forward," said Peter R. Dolan, Bristol's chairman and chief executive. "We continue to make substantial progress in reducing U.S. wholesaler inventory to desirable levels, with more than 75 percent of the work-down completed to date and more than 90 percent expected to be achieved by year-end 2002."

The company also announced third quarter earnings but said they would were not presented in accordance with generally accepted accounted principles and would likely be restated.

Net earnings plunged to $245 million, or 13 cents a share, for the July-September period from $1.2 billion, or 63 cents a share, a year earlier. Revenues fell 12 percent to $4.2 billion from $4.7 billion.

Earnings from continuing operations fell to $499 million or 26 cents a share, which was in line with the consensus estimate of analysts surveyed by Thomson First Call.

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