updated 7/29/2004 9:21:12 AM ET 2004-07-29T13:21:12

Bristol-Myers Squibb Co. said Thursday that second quarter earnings plunged 42 percent as the drug company increased legal reserves and wrote-off research and development costs. It raised its full-year earnings guidance.

The company earned $527 million, or 27 cents a share, for the three months ended June 30, down from $902 million, or 46 cents a share. a year earlier.

Excluding one-time items, Bristol-Myers earned 46 cents a share, beating the 39 cents a share consensus estimate of analysts surveyed by Thomson First Call.

Bristol-Myers raised its guidance for full-year earnings to between $1.60 and $1.65 a share from between $1.50 and $1.55 a share.

During the quarter, the company took a $455 million charge for litigation matters stemming from a wholesaler inventory glut while it also took a $62 million charge to write-off research and development costs related to its acquisition of Acordis Speciality Fibres. The company said a changing product mix and patent losses also contributed to the earnings decline.

Revenues at the maker of cholesterol-lowering drug Pravachol and blood-clot medicine Plavix rose 6 percent to $5.43 billion from $5.13 billion in the year-ago period.

For the six months, Bristol-Myers earnings sank 12 percent to $1.49 billion, or 76 cents a share, from $1.69 billion, or 87 cents a share, a year earlier. Revenues rose 8 percent to $10.6 billion for the six months from $9.86 billion a year earlier.

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