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Pfizer exceeds 4Q forecasts
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January 18, 2000: 1:15 p.m. ET
Drug maker posts 34% profit rise; Abbott Labs meets Wall St. targets
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NEW YORK (CNNfn) - Pfizer Inc. reported a 34 percent increase in fourth-quarter earnings Tuesday, slightly better than Wall Street expected, on the strength of several blockbuster medicines and lucrative marketing agreements with other drug makers.
Also Tuesday, drug and medical diagnostics equipment maker Abbott Laboratories (ABT) posted fourth-quarter profit in line with analysts' expectations as net income rose about 6 percent.
Pfizer's solid quarterly results come as the company, the first major U.S. drug maker to report fourth-quarter profit, battles to take over rival Warner-Lambert Co. (WLA). Warner-Lambert, which co-markets its fast-selling cholesterol-lowering drug Lipitor with Pfizer (PFE), agreed last week to consider Pfizer's unsolicited bid, which is worth about $77.7 billion.
For the fourth quarter, New York-based Pfizer earned $954 million excluding one-time items, or 25 cents per diluted share, up from $711 million, or 18 cents per share, in the 1998 period.
The First Call consensus estimate was 23 cents per share.
The results were adjusted to reflect a three-for-one stock split effective June 30.
"The results are very positive," said pharmaceutical analyst Viren Mehta of Mehta Partners. "Pfizer has fundamentals working in its favor."
Mehta Partners has a "hold" rating on Pfizer stock, saying the company's outlook is undefined in light of the takeover battle for Warner-Lambert.
Pfizer stock lost 13/16 to 36-3/16 in afternoon trading Tuesday amid a generally weak session for pharmaceutical stocks.
Profit results for the latest quarter included no special items. But factoring in one-time items in the year-earlier period, 1998 fourth-quarter net income was $634 million, or 16 cents per share.
The 1998 period included special pretax charges of $641 million associated with acquisitions, legal settlements and other items, as well as a $361 million after-tax gain associated with the sale of the Medical Technology Group.
Revenue jumped 17 percent to $4.5 billion in the latest period. Worldwide sales of the company's best-selling drug, hypertension treatment Norvasc, rose 14 percent to $817 million, while sales of antidepressant Zoloft increased 6 percent to $517 million. Sales of male impotence remedy Viagra, the company's best-known product, grew 19 percent to $281 million.
Fourth-quarter revenue from marketing agreements soared 107 percent to $619 million, reflecting sales from the co-promotion of Warner-Lambert's Lipitor, Eisai Co.'s Alzheimer's disease treatment Aricept, and Celebrex, an arthritis drug developed by Monsanto Co.'s G.D. Searle pharmaceutical unit.
Celebrex was the most successful new drug launched in 1999, with about $1.5 billion in sales.
For the full year, Pfizer's net income including one-time gains and charges fell 5 percent to $3.2 billion, or 82 cents per diluted share. The 1999 declines reflect a one-time after-tax gain of $1.4 billion from the Medical Technology Group sale in 1998.
Revenue rose 20 percent to $16.2 billion in 1999.
For all of 1999, five of the company's drugs topped $1 billion in sales: Norvasc, Viagra, Zoloft, antibiotic Zithromax and Diflucan, an anti-fungal medication. Sales of these five drugs rose at a combined annual rate of 18 percent.
The company also reiterated previous forecasts that its 2000 earnings should rise about 20 percent. Pfizer said it plans to invest $3.2 billion in research and development during the year.
Abbott results on target
Abbott Laboratories, a developer and distributor of drugs for hypertension, HIV and other diseases as well as a manufacturer of medical devices and hospital products, posted fourth-quarter net profit of $664 million, or 43 cents per share, up from $628 million, or 40 cents per share, in the year-earlier period.
The per-share results matched the First Call consensus forecast.
Sales for the Illinois-based firm rose 4 percent to $3.5 billion during the quarter Total sales were hurt slightly by the relatively stronger U.S. dollar, the company said.
During the quarter, Abbott and drug delivery firm Alza Corp. (AZA) called off their $7.3 billion merger, citing regulatory hurdles.
For the full year, net earnings rose 5 percent to $2.5 billion, or $1.57 per diluted share. Net sales rose 5 percent to $13.2 billion.
Abbott stock slipped 7/8 to 33-5/8 in afternoon trading. 
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