Bristol-Myers Squibb lowers EPS guidance

Bristol-Myers Squibb has announced that it is lowering its guidance for 2006 earnings per share from its continuing operations on a GAAP basis from $0.97-$1.02 (0.49-0.52 pounds) to $0.72-$0.77.

The reduction in this guidance is a result of two financial changes affecting the company.

First is an agreement in principle with the United States Department of Justice and the Office of the United States Attorney for the District of Massachusetts for a $499 million civil resolution of a number of investigations regarding the company’s pricing, sales and marketing activities.

Second is an unrelated pre-tax charge of an estimated $220 million for debt restructuring that was previously disclosed by the company.

“As a result of the agreement in principle, the company has increased its reserves related to these investigations by $353 million, bringing the aggregate reserves for these matters to $499,” the company said.

“The increase reserve will be recorded in the fourth quarter of 2006,” it added.

The company added that it predicts that some part of the $499 million payment will be tax-deductible, though it could not as yet give a reasonable calculation of the extent of this tax benefit.

Earlier this month, the company announced a quarterly dividend of $0.28 per share to be payable at the start of February 2007.