Productivity Improvements Boost Pharmacia Earnings

On a more modest revenue increase of 7.1% to 26.45 billion Swedish kroner ($3.63 billion), Pharmacia posted a 51.2% rise in net earnings of 3.28 billion kroner ($450.0 million) for 1994. Operating income was up 62.2% at 5.40 billion kroner, and earnings per share rose 51.1% to 12.92 kroner. Adjusted for non-recurring items, the rise in operating income was 20%, the company noted.

1994 saw the full integration of the Italian Farmitalia Carlo Erba group, bought in May 1993, and a number of structural changes were carried out. The most notable of these was the divestiture in June of Deltec Inc, a US-based company that makes and markets ambulatory pumps and ports for drug delivery. The transaction generated a capital gain of 596 million kroner for Pharmacia.

To adjust production capacity to demand, a limited number of high-tech manufacturing centers are being established, with the highest standards of technology, quality and expertise, says Pharmacia. As a result, some 20 plants, or about half of the present production units, will be sold or closed. As a step in this process, it has been decided to concentrate tablet production on Ascoli, Italy. Details of the company's research appear on page 21.