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Schering affirms 2Q
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June 28, 2001: 12:29 p.m. ET
Drugmaker says it could beat expectations despite plant woes
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NEW YORK (CNNfn) - Drugmaker Schering-Plough Corp. affirmed second-quarter earnings expectations Thursday, despite having spent millions to overcome manufacturing problems in the past few months.
The maker of No. 1 allergy drug Claritin said it expects to earn 43 cents a share in the second quarter. Wall Street analysts were expecting the company to earn 41 cents a share, according to earnings tracker First Call.
"For now and the rest of 2001, we will be taking a quarter-by-quarter approach, providing periodic updates as the year progresses," CEO Richard Jay Kogan said.
Schering-Plough, which is expected to report earnings July 12, told an analyst conference it had spent more than $60 million to correct manufacturing deficiencies found in February by the U.S. Food and Drug Administration at the company's plants in New Jersey and Puerto Rico.
The company warned in February that earnings throughout 2001 could suffer as a result of the plant problems, and it said June 22 that the FDA was not yet satisfied with its efforts to correct them.
Schering-Plough said the FDA has told the company it must improve its manufacturing procedures before it approves its new allergy treatment Clarinex.
Wall Street has been especially concerned about the fate of Clarinex, the intended successor to Claritin, which brings in $3 billion a year in sales. The U.S. patent on Claritin expires in late 2002.
Despite the continuing problem, Kenilworth, N.J.-based Schering-Plough said it will not outsource its manufacturing operations and plans to spend "significant" additional money on fixing plant problems.
Schering-Plough (SGP: down $0.01 to $36.97, Research, Estimates) shares were up slightly in Thursday morning trading, but still well below their 52-week high. Wall Street is generally not accustomed to bad news from drug stocks, which have been a rock of stability in the stock-market downturn in the past year.
Schering-Plough's annual analyst meeting in New York took place a day after it announced the resignation of president and chief financial officer Raul Cesan. 
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Schering-Plough
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