Pfizer Reports 52 Percent Drop in Third Quarter

Pfizer Inc. (PFE) on Thursday reported a 52 percent drop in third-quarter profit and withdrew its financial outlook through 2007 due to tumbling sales of its Celebrex (search) arthritis drug and generic competition for other medicines, sending shares down almost 6 percent.

The world's largest drugmaker also said it expects 2005 earnings to fall as much as 9.4 percent, a steeper decline than its earlier forecast.

Pfizer had said last summer its fortunes would dramatically improve next year, with 2006 earnings rising in the double digits and accelerating double-digit growth in 2007. But it acknowledged Thursday the upbeat scenario may no longer be valid.

"We are evaluating our financial prospects for 2006 and 2007 in light of current and anticipated business conditions and are withdrawing our prior guidance for those years," Chief Executive Officer Hank McKinnell (search) said.

Pfizer said it will not provide new financial outlooks until early next year.

Third-quarter profit dropped to $1.59 billion, or 22 cents per share, from $3.34 billion, or 44 cents per share, in the year-ago period.

Excluding special items, New York-based Pfizer earned 51 cents per share, 3 cents per share above Wall Street (search) expectations, but 7 percent below year-ago results.

Pfizer took charges of about $3.4 billion related to recent acquisitions, including biotechnology company Vicuron Pharmaceuticals.

Pfizer stock was off $1.38 to $22.59 on the Inet electronic brokerage system Thursday morning.

Pfizer shares have dropped more than 12 percent so far this year, compared with little change in the American Stock Exchange Pharmaceutical Index, which includes large U.S. and European drugmakers. The stock is currently at an eight-year low.

Quarterly revenue fell 5 percent to $12.19 billion.

On Thursday, it said sales are declining more steeply than anticipated. Consequently, it now expects 2005 earnings of $1.92 to $1.94 per share, instead of its previous forecast of $1.98.

Sales of arthritis drug Celebrex, which has been linked to heart problems following the withdrawal of Merck and Co. Inc.'s (MRK) Vioxx medicine, tumbled 44 percent to $446 million in the most recent quarter.

Earlier this year, Pfizer said 2005 revenue would drop because of generic competition, slackening demand for Celebrex and the withdrawal of its newer arthritis drug Bextra.

One bright spot was cholesterol fighter Lipitor, whose quarterly sales rose 6 percent to $2.9 billion.