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Fourth-quarter and full-year results for 2003 are revised upward.
Stephen Taub, CFO.com | US
March 16, 2004
Drug maker Bristol-Myers Squibb Co. announced that it revised its fourth-quarter 2003 earnings upward, from $429 million to $506 million, and raised revenues, from $5.6 billion to $5.7 billion, to correct accounting errors.
For the full year, the company reported earnings of $3.10 billion on revenues of $20.9 billion, compared with previously disclosed earnings of $2.95 billion on revenues of $20.7 billion.
Bristol-Myers also restated earnings for the four years ended 2002. The company raised 1999 earnings by 12 cents per share, lowered 2000 earnings by 7 cents per share, lowered 2001 earnings by 9 cents per share, and raised 2002 earnings by 3 cents per share.
Bristol-Myers "has continued to identify and implement actions to improve the effectiveness of its disclosure controls and procedures and internal controls over financial reporting," stated the company in a press release. "These actions led to the company identifying many of the items in the restatement."
The company explained that the latest restatement corrects the classification of certain investments as marketable securities instead of cash and cash equivalents. In addition, certain amounts have been reclassified from "other expense, net," to the appropriate expense item in the statement of earnings, with no overall impact on net earnings for any of the periods presented, it added.
In connection with the restatement, the company also determined that certain inappropriate adjustments to tax items, including adjustments for contingency reserves made prior to 2000 for the improper purpose of recording a provision for income taxes consistent with the company's projected effective tax rate, may have been reflected in the errors corrected in the restatement.
Bristol-Myers also said it revised previously disclosed fourth-quarter and full-year 2003 earnings to reflect additional charges of $29 million, which were included in the revision figures.
The increase relates primarily to an increase in the litigation reserve for wholesaler inventory issues, from $125 million to $150 million, to reflect a change in the company's estimate of the minimum expected probable loss in connection with the matter.
Last year Bristol-Myers announced that it overstated sales by about $2.5 billion over a three-year period as a result of deals with two large U.S. drug wholesalers. The company subsequently restated earnings downward by $900 million.