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Pfizer beats Street
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October 24, 2000: 11:33 a.m. ET
Drug maker reports 30% 3Q profit rise; Schering-Plough meets targets
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NEW YORK (CNNfn) - Pfizer Inc.'s third-quarter profit jumped 30 percent as sales of its top medicines posted healthy gains, helping the world's biggest drug maker top Wall Street forecasts Tuesday. Rival Schering-Plough Corp. matched analysts' expectations.
Excluding one-time charges and merger-related costs, New York-based Pfizer reported income of $1.7 billion, or 27 cents a share, in the third quarter, up from $1.3 billion, or 21 cents a share, in the 1999 period. Analysts surveyed by First Call Corp. had forecast the company would earn 25 cents a share.
 Sales rose 7 percent to $7.2 billion from $6.7 billion in the corresponding period last year.
Despite the better-than-expected profit report, Pfizer (PFE: Research, Estimates) shares slipped $2.75, or 6 percent, to $42.63 in morning trading. The stock gained $2 Monday amid speculation that Pfizer -- now the leading global drug maker following its June acquisition of Warner-Lambert Co. -- might be added to the Dow Jones industrial average. The proposed merger of General Electric Co. (GE: Research, Estimates) and Honeywell International (HON: Research, Estimates) would create an open spot.
The results also come on the heels of strong earnings reports from other drug makers, including No. 2 U.S. pharmaceutical firm Merck & Co., which blew past Wall Street estimates Friday in its third-quarter report. Drug industry analyst Herman Saftlas, of S&P Equity Group, said that while Pfizer exceeded forecasts, the company's revenues were hit a little deeper than expected by the euro currency woes and sales of cholesterol-lowering drug Lipitor fell short of expectations.
Sales of Lipitor, a drug developed by Warner-Lambert, rose 22 percent to $1.2 billion in the quarter. Sales of male impotence treatment Viagra rose 36 percent to $332 million. Hypertension treatment Norvasc posted sales of $847 million, an increase of 9 percent, while sales of antidepressant Zoloft increased 7 percent to $555 million.
The company also saw alliance revenue surge 63 percent to $298 million. The company co-markets the fast-selling arthritis painkiller Celebrex with Pharmacia Corp. (PHA: Research, Estimates) and co-promotes Aricept, an Alzheimer's treatment, with Eisai Co. Ltd. of Japan.
Pfizer also said merger-related cost savings are expected to total about $400 million this year, double the amount earlier projected.
"The integration with Warner-Lambert continues to be remarkably smooth and effective," Pfizer President and Chief Operating Officer Henry A. McKinnell said. "We are achieving our objective of drawing on the best practices of both companies to create an organization superior to either alone."
Including one-time items, third-quarter earnings rose 23 percent to $1.36 billion, or 21 cents per diluted share.
For the first nine months, profit, including one-time items, dropped 34 percent to $2.31 billion, or 36 cents per diluted share, dragged down by charges associated with the withdrawal of diabetes treatment Rezulin earlier this year. Revenues increased 8 percent to $21.5 billion for the nine months.
Schering-Plough meets the Street
Schering-Plough, maker of the blockbuster allergy fighter Claritin, reported that third-quarter profit rose 14 percent to $591 million, or 40 cents a share, from $518 million, or 35 cents, for the same period in 1999. The results matched the First Call consensus estimate.
 Sales increased 7 percent in the third quarter to $2.4 billion, with global pharmaceutical sales up 8 percent to $2.1 billion.
Claritin sales rose 10 percent to $787 million.
Schering-Plough (SGP: Research, Estimates) CEO Richard Jay Kogan said the Kenilworth, N.J.-based drug maker would meet analysts' profit expectations of $1.64 a share for the full year.
For the first nine months of the year, earnings rose 19 percent to $1.9 billion, or $1.25 per diluted share, up from $1.6 billion, or $1.09 per share, in the corresponding 1999 period. Sales rose 8 percent to $7.4 billion.
In morning trading, Schering-Plough shares slipped 38 cents to $52.62. 
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