Pfizer bumps up sales forecast
Drugmaker raises 2008 revenue outlook; quarterly results boosted by weak dollar; Lipitor sales decline in '07; company plans to "exit" 12 more plants.
NEW YORK (CNNMoney.com) -- Pfizer, the world's largest drugmaker, reported adjusted quarterly earnings that exceeded Wall Street's estimates on Wednesday and lifted its full-year sales outlook.
The New York-based drug giant said fourth-quarter net income plunged 70 percent to $2.9 billion, or 42 cents a share, from the year-ago period.
Pfizer said the decline stemmed from the sale of its consumer health business to Johnson & Johnson, which resulted in an after-tax gain of $7.9 billion in the fourth-quarter of 2006.
But excluding charges, earnings per share surged to 52 cents, beating the 47 cents a share that analysts surveyed by Thomson First Call had projected.
Fourth-quarter revenue increased 4 percent to $13.1 billion, exceeding the $12.2 billion analysts had expected. The weak U.S. dollar was partially responsible for this increase, providing a boost of more than $600 million, the company said.
Pfizer's (PFE, Fortune 500) stock edged higher about 1 percent on the results. The company was one of the few stocks in the pharmaceutical sector to advance amid a broad market sell-off Wednesday.
"Overall, I'd call it a solid quarter for them," Jon LeCroy, analyst for Natixis Bleichroeder, said, noting that "currency was a big factor" in driving up sales.
Cost-cutting helped lift earnings. In a teleconference with analysts, Pfizer chief executive Jeffrey Kindler said the company cut 11,000 jobs in 2007 and "exited" six factories and two R&D sites.
"The actions were painful, but they were necessary," said Kindler, who plans to purge the company of another dozen plants and reduce costs by up to $2 billion in 2008.
"Much has changed at Pfizer, [and] much will change," he said.
Pfizer bumped up its revenue guidance, saying it expects 2008 sales in the range of $47 billion to $49 billion, versus an earlier forecast of $46.5 billion to $48.5 billion.
For 2007, the drugmaker reported sales of $48.6 billion, up 1 percent from 2006. The company said the weak U.S. dollar benefited its international business, boosting sales by $1.5 billion.
The company's profit for 2007, without charges, rose 2 percent from the prior year to $15.3 billion. Including charges, profit plunged 57 percent to $8.3 billion.
Revenue for Lipitor, a cholesterol-lowering statin and the top-selling drug of all time, slipped 2 percent in 2007 to $12.7 billion, despite a mild boost in overseas business from the weak dollar, the company said. Pfizer blamed pressure from generic drugs.
Pfizer's own blood pressure blockbuster Norvasc also went generic after its patent expired last year, putting pressure on company-wide sales.
But relatively new products helped drive revenue. The company said sales for the anti-smoking drug Chantix tripled in the fourth quarter to $280 million. Sales for the nerve painkiller Lyrica jumped 60 percent to more than $500 million. Sales for Sutent, a treatment for cancer of the kidneys and digestive system, surged 75 percent to nearly $200 million.
Pfizer is the world's biggest drugmaker by sales from pharmaceuticals. Johnson & Johnson (JNJ, Fortune 500) is larger than Pfizer in terms of overall sales, but its revenues are derived from consumer products and medical devices as well as drugs.