US stocks skidded yesterday as disappointing earnings from drug giant Merck & Co and other large companies prompted investors to sell after the recent run-up in share prices.
On Wall Street, the Dow Jones Industrial Average fell more than 1.5 per cent, its biggest one-day fall for a month. The Dow reached a 16-month high last week. The Nasdaq, which hit a 19-month peak last week, ended off 2.2 per cent yesterday.
Merck, which employs 450 in Tipperary, will shed 4,400 jobs worldwide after worse-than-expected third-quarter earnings.Quarterly sales rose just 6 per cent to $5.76 billion (€4.9 billion) in the quarter, below analysts' average forecast of $5.87 billion.
The company said it has yet to decide whether Irish operations will be affected.
Pfizer, the world's largest drugmaker with a workforce of 1,000 in the Republic, said third-quarter earnings fell, as costs associated with its acquisition of Pharmacia offset sales growth of prescription drugs.
Pfizer said it earned $2.24 billion, or 29 cents per share, compared with $2.35 billion, or 38 cents per share, in the year-ago quarter. The company lowered its fourth-quarter earnings estimate by three cents to 51 cents per share, citing trends in company spending. But it continues to expect full-year 2003 operating earnings to grow 9 per cent.
GlaxoSmithkline, with 1,400 employees here, defied market expectations to report pre-tax profits up 22 per cent at £1.69 billion sterling (€2.4 billion) in the third quarter of 2003. Turnover rose 9 per cent to £5.47 billion.
Wyeth, which employs nearly 2,000 in the State, posted a third-quarter loss after taking a $2 billion charge in relation to recalled diet pills.
Schering-Plough, which has 1,000 workers in the Republic, also reported a third-quarter loss as sales fell and it increased reserves for litigation related to investigations into its sales and marketing practices.
The company said it lost $265 million compared with a profit of $429 million in the year-ago quarter. Revenue fell 16 per cent to $2 billion from $2.4 billion a year ago, reflecting declining sales of its allergy drug Claritin and its hepatitis C drugs.
Novartis, which also employs around 1,000 here, said third-quarter net profit rose 7 per cent to $1.28 billion. Europe's third-biggest drugmaker said it saw record 2003 profits despite margin pressures. Sales at its drug division rose an underlying 12 per cent, and 17 per cent expressed in weak dollars, to $4.04 billion.
Boston Scientific, which employs more than 3,000 people in Ireland, reported that its third-quarter earnings before items rose 38 per cent, beating expectations amid strong sales of a key new coronary device overseas.
But net income at the Natick, Massachusetts-based company was lower because of a one-time gain in the year-ago quarter.
- (Additional reporting, Reuters/PA)
