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Drug Co. Schering’s Profit Falls

October 24, 2002

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KENILWORTH, N.J. (AP) _ Drug maker Schering-Plough Corp. said third-quarter profit plunged 29 percent due to higher costs for manufacturing, research and other items and nearly flat revenues as sales of its key allergy drug fell by half.

The maker of allergy, respiratory and hepatitis drugs on Thursday reported net income of $429 million, or 29 cents per share.

That beat by a penny the consensus forecast of analysts surveyed by Thomson First Call, but analysts had slashed their forecast twice after Schering warned it couldn’t make their targets because of slumping sales of its nonsedating allergy drug, Claritin. Analysts had forecast earnings of 42 cents per share, then cut back to 35 cents and finally 28 cents after the last warning on Oct. 2.

A year ago, Schering posted net income of $601 million, or 41 cents per share.

Revenues increased only 2 percent, to $2.42 billion from $2.38 billion.

Sales of Claritin, which traditionally accounted for one-third of the company’s revenues, dropped to $402 million, compared with $828 million in the third quarter of 2001. That plunge was anticipated because an over-the-counter version of Claritin will soon be launched and wholesalers have been reducing their inventories.

Richard J. Kogan, Schering’s chairman and chief executive officer, said he expects flat earnings per share for all of 2002. Last year, the company earned $1.58 per share.

For the first nine months of the year, Schering-Plough’s net income was down 8 percent, to $1.66 billion or $1.13 per share from $1.8 billion or $1.22 per share. Revenues for the first three quarters totaled $7.81 billion, down 7 percent from $7.3 billion in the first nine months of 2001.

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On the Net: http://www.schering-plough.com

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