Pfizer Beats Expectations In Spite of Lower Profits
NEW YORK – Pfizer Inc. (PFE) Thursday said fourth-quarter profit fell, hurt by generic competition, but cost cuts helped the company beat Wall Street expectations and its shares jumped 3 percent.
The world's biggest drug maker said it earned $2.73 billion, or 37 cents per share, compared with $2.83 billion, or 38 cents per share, a year earlier.
Excluding a series of one-time items, New York-based Pfizer earned 51 cents per share. Analysts polled by Reuters Estimates, on average, had forecast 42 cents.
Pfizer said quarterly revenue fell 9 percent to $13.59 billion, a better showing than the $13.27 billion Wall Street had forecast.
"Investors will look at quarter and like fact that they beat estimates," said Oppenheimer & Co. analyst Scott Henry.
But he noted that Pfizer last October pulled its forecasts for 2006 and 2007, creating lingering uncertainty about the prospects for Pfizer.
Henry said he can't "interpret a lot of enthusiasm" for Pfizer until the company provides new forecasts on Feb. 10.
Global sales of cholesterol fighter Lipitor edged up 3 percent to $3.36 billion, a continuation of anemic growth in recent quarters as health insurers steer patients to less-expensive and less-potent products.
Even so, annual sales of Lipitor grew 12 percent to $12.19 billion, easily preserving its title as the world's top-selling prescription drug.
For full-year 2005, total company revenues slipped 2 percent to $51.3 billion, as cheaper generics cut deeply into sales of Pfizer treatments that have recently lost patent protection.
They include epilepsy treatment Neurontin, whose fourth-quarter sales plunged 71 percent to $141 million, and hypertension drug Accupril, which fell 74 percent to $44 million.
Contributing to the pain was arthritis treatment Celebrex, whose quarterly sales fell 53 percent to $472 milllion. Demand for the medicine has waned sharply following the recall in 2004 of Vioxx, a similar drug made by Merck & Co. (MRK) that has been linked to heart attacks and stroke.
Celebrex itself has also been linked in one large trial to a two-fold increase in heart attack risk, although Pfizer has staunchly defended its safety.
Pfizer in October withdrew its rosy outlook for 2006 and 2007 — sending shares at the time to an eight-year low. It had been predicting earnings would rise in the double-digit percentage range in 2006, with accelerating double-digit growth in 2007.
Pfizer shares have since rebounded, bolstered by a recent victory over Indian generic drugmaker Ranbaxy Laboratories Ltd. in a patent battle over Lipitor and Pfizer's decision to sharply raise its quarterly dividend.
The company said it will provide new financial forecasts for 2006 next month at an analyst meeting, after re-assessing its financial condition.
Pfizer shares rose to $24.82 before the bell on Thursday from Wednesday's close of 24.