Pharmaceutical giant Pfizer Inc. (PFE: Quote) on Tuesday said profit in the first quarter declined 19 percent from last year as revenues fell 7 percent with its cholesterol drug Lipitor losing patent exclusivity last year. Yet, adjusted earnings topped Wall Street estimates.
The company cut its outlook for the full year, to partly reflect the impending sale of the nutrition business to Nestlé SA (NSTR.L, NSRGY.PK) for $11.85 billion.
Ian Read, CEO, said, "I am pleased with our first-quarter 2012 financial performance, which was driven primarily by growth in certain brands including Celebrex, Enbrel and Lyrica, growth in key geographies such as China, as well as our continued ability to realize cost savings and efficiently allocate our shareholders' capital."
Net income attributable to the company declined to $1.79 billion from $2.22 billion. Earnings per share fell to $0.24 from $0.28.
The latest results included purchase accounting adjustments as well as restructuring, impairment charges and legal matters. The company took a $450 million charge in connection with an agreement-in-principle to settle a lawsuit by Brigham Young University related to arthritis treatment Celebrex.
Adjusted earnings dropped to $0.58 per share from $0.60 per share. On average, 17 analysts polled by Thomson Reuters expected earnings of $0.56 per share for the quarter. Analysts' estimates typically exclude special items.
Revenues declined 7 percent to $15.41 billion from $16.50 billion. Analysts expected revenues of $15.47 billion for the quarter.
The revenue decline was due to an operational decline of 6 percent and the unfavorable impact of 1 percent from foreign exchange.
U.S. revenues dropped 15 percent to $6.0 billion, primarily as a result of the loss of exclusivity of Lipitor on November 30, 2011. International revenues were $9.5 billion, almost unchanged from last year.
Primary Care unit revenues decreased 25 percent to $4.1 billion, primarily due to the loss of exclusivity of Lipitor in the U.S. and the resulting shift in the reporting of U.S. Lipitor revenues to the Established Products unit beginning January 1.
Specialty Care unit revenues declined 9 percent to $3.58 billion. U.S. and developed Europe Prevnar 13/Prevenar 13 revenues dropped from last year as most patients eligible to receive the pediatric catch-up dose have already been vaccinated.
Established Products unit revenues increased 17 percent to $2.8 billion, driven partly by recent launches of generic versions of some Pfizer branded primary care and specialty care products.
Revenue from the animal health unit grew 4 percent to $1.03 billion. Pfizer said it remains on-track to finalize a strategic decision for the Animal Health business this year. The company continues to expect that the separation of that business will occur between July 2012 and July 2013.
Lipitor revenues dropped 42 percent to $1.4 billion. The drug was the world's largest selling drug and generated sales of $7.89 billion in the U.S. through September 2011.
Celebrex generated $634 million, up 7 percent from last year. Pain-pill Lyrica's sales climbed 16 percent to $955 million.
Sales of Enbrel, used to treat rheumatoid arthritis, ankylosing spondylitis and psoriasis, rose 3 percent to $899 million outside the U.S. and Canada.
For 2012, the company now expects earnings per share of $1.23 to $1.38 compared to the previous forecast of $1.37 to $1.52 per share. The change reflects the recent decision to divest the Nutrition business to Nestle as well as additional expenses related to certain legal matters and some asset impairment charges.
Adjusted earnings are anticipated to be $2.14 to $2.24 per share compared to the prior forecast of $2.20 to $2.30 per share.
Reported revenues are now estimated to range from $58 billion to $60 billion, lower than the previous forecast of $60.5 billion to $62.5 billion.
Analysts estimate earnings of $2.26 per share for the full year on $62.14 billion in revenues.
Separately, Pfizer announced the resolution of a legal matter against Brigham Young University and Daniel Simmons. The company said the parties have reached an amicable settlement on confidential terms.
"As part of the resolution, BYU will establish the Dan Simmons Chair in recognition of Simmons' lifelong work and contributions towards advancing human health in a number of important areas including oncology, pain and Alzheimer's," Pfizer said.
PFE closed on Monday at $22.90, down from the prior close of $23.08, on a volume of 74.91 million shares.
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by RTT Staff Writer
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