Pfizer earnings fall but top forecasts
NEW YORK - Pfizer Inc. (PFE) reported that its fourth-quarter profit fell by half due to higher costs for production, administration and restructuring, yet the world's second-biggest drugmaker topped Wall Street expectations.
The New York-based company's revenue rose by 7 percent, ending a long stretch of declining sales due to generic competition to one-time blockbusters. Pfizer benefited from growing sales of its newest products, as well as the additional of injectable medicines made by Hospira, which it acquired last September.
The maker of Viagra and pain treatment Lyrica said on Tuesday that net income was $613 million, or 10 cents, per share. A year earlier, its net income was $1.23 billion, or 19 cents per share.
Adjusted for non-recurring costs, including a charge for currency devaluation in Venezuela, income in the latest quarter was 53 cents per share. The average estimate of 10 analysts surveyed by Zacks Investment Research was 52 cents per share.
Like many rival drugmakers, Pfizer lost patent protection over that last several years on many of its biggest drugs, which had raked in billions annually. Those are led by cholesterol fighter Lipitor, which lost patent protection in November 2011 after nearly a decade as the world's top-selling drug.
But in the fourth quarter, the drugmaker posted revenue of $14.05 billion in the period, up from $13.12 billion a year earlier. Analysts surveyed by Zacks expected $13.61 billion.
The total included $1.51 billion is sales of injectable medicines. In addition, sales of Lyrica rose 6 percent to $955 million, and sales of the Prevnar vaccine against pneumonia and other bacterial infections surged 43 percent to $1.86 billion.
Pfizer is in the process of buying Irish drugmaker Allergan for $160 billion in a deal that would move Pfizer's official headquarters for tax purposes from New York to Allergan's base in Ireland. The strategy, called a tax inversion, would sharply decrease Pfizer's income tax bill compared to current U.S. tax rates, though the drugmaker's operations would still be run from New York.
"I believe that we are well positioned to deliver another strong year in 2016," Pfizer CEO Ian Read said in a statement. "The integration of Hospira is well under way and we now look forward to completing the combination with Allergan, which we still expect to occur during the second half of this year. We see this transaction as a very effective driver of accelerating the growth potential of our Innovative business, strengthening our established business and more efficiently allocating our capital globally."
Pfizer expects full-year earnings in the range of $2.20 to $2.30 per share, with revenue in the range of $49 billion to $51 billion.
Pfizer shares slipped 52 cents, or 1.7 percent, to $29.65 in premarket trading ahead of the market open. They have declined 6.5 percent since the beginning of the year, while the Standard & Poor's 500 index has declined 5 percent. The stock has declined 3.5 percent in the last 12 months.