Earnings Preview: Schering-Plough Corp.

Schering-Plough (SGP) is expected to report Q2 earnings before market open Monday, July 21, with a conference call scheduled for 8:00 am ET.

Guidance

Analysts are looking for a profit of 41c on revenue of $4.77B. The consensus range is 28c to 48c for EPS, and revenue of $4.55B to $4.92B, according to First Call

Analyst Views

Positive drivers for this earnings period include the Organon Bio-Sciences acquisition that Schering made last year and strong sales of Remicade. Negative drivers for this period include the Vytorin controversy that has plagued Merck (MRK) and Schering-Plough, as it might have a more pronounced effect on Schering, since the drug giant derives more than one-third of its pre-tax profits from Vytorin. Generics could also pressure some of Schering's brand drugs. Schering's pipeline is solid and double-digit 2007-12 EPS growth rate is projected but until the outcome of the SEAS study is known, Leerink Swann advises remaining on the sidelines. The firm doesn't anticipate recovery for the drug maker for at least 6-9 months and believes the stock will trade in a price range in the low $20s. The firm has a Market Perform rating on the shares.

Comments

[thoroughbred]

I am long the common from the $14-$15 range and long even more of the Preferred B in the $150 range, gotta love a 10% yield and a 25% upside in about 5-6 months, is convertible into between 750 and 900 shares of common depending on avg. price for 20 days before exp. in late '09. It was issued at $250 with an 6% ($15) yield initially