Pfizer tops forecasts on higher sales, lower taxes
Pfizer (PFE) easily beat Wall Street expectations for the first quarter as the biggest U.S. drugmaker's net income jumped 27 percent due to higher sales and a lower tax bill. The company raised its 2016 financial forecasts, citing its strong operational performance in the quarter and an improved business outlook.
Its shares surged almost 3 percent in premarket trading.
Just four weeks after dropping its record $160 billion deal to buy fellow drugmaker Allergan Plc and move its headquarters on paper to Ireland to reduce its taxes, New York-based Pfizer Inc. on Tuesday reported first-quarter net income of $3.02 billion, or 49 cents per share. That was up from $2.38 billion, or 38 cents per share, in 2015's first quarter.
Excluding one-time items, adjusted profit in the latest quarter was 67 cents per share, 12 cents better that the 55 cents expected by analysts surveyed by Zacks Investment Research.
The maker of Viagra and pain treatment Lyrica posted revenue of $13.01 billion in the period, up 20 percent and well above the $11.97 billion analysts expected.
Sales got a lift in part by changes in currency exchange rates and by revenue from Pfizer's $15 billion purchase last September of injectable drugmaker and infusion device maker Hospira. That deal gave Pfizer a leading position in the global market for injectable drugs, including a new class of lower-cost biotech drugs known as biosimilars.
Pfizer said it now expects 2016 earnings in the range of $2.38 to $2.48 per share, up from its prior forecast of $2.20 to $2.30. Pfizer forecast revenue in the range of $51 billion to $53 billion, $2 billion higher than its last forecast.
In premarket trading, Pfizer shares rose 90 cents, or 2.7 percent, to $33.70.
"We began the year with very strong operational performance across both our Innovative and Established businesses and this has served as a key driver of an increase in both our revenue and earnings-per-share guidance for the remainder of the year," Ian Read, chief executive and chairman of the board, said in a statement. ""In addition, we have made excellent progress integrating the legacy Hospira operations and now expect to achieve $1.0 billion of Hospira cost savings by 2018, 25 (percent) more than our initial cost savings target of $800 million."
Pfizer shares have risen nearly 2 percent since the beginning of the year, while the Standard & Poor's 500 index has climbed almost 2 percent.