Pharmaceutical giant Pfizer, Inc. (PFE) reported Tuesday a profit for the second quarter that increased 25 percent from last year, reflecting cost cutting and strong sales of pain medication Lyrica.
However, total revenues declined 9 percent, as Lipitor sales were hurt by generic competition in the U.S. Pfizer lost exclusivity rights on the popular cholesterol drug in the fourth quarter of 2011.
Adjusted earnings per share and quarterly revenues topped analysts' expectations. Pfizer also maintained its earnings and revenue forecast for the full-year 2012.
"We delivered solid results this quarter. This performance was achieved despite the $1.8 billion, or 11%, negative impact on revenues of product losses of exclusivity compared with the year-ago period, primarily Lipitor in most major markets," Chairman and CEO Ian Read said in a statement.
The New York-based company reported net income of $3.25 billion or $0.43 per share for the second quarter, sharply higher than $2.61 billion or $0.33 per share in the prior-year quarter.
Adjusted net income, which excludes one-time items, grew to $4.67 billion or $0.62 per share from $4.65 billion or $0.59 per share in the year-ago quarter.
On average, 14 analysts polled by Thomson Reuters expected the company to earn $0.54 per share in the second quarter. Analysts' estimates typically exclude special items.
Revenues for the quarter decreased 9 percent to $15.06 billion from $16.49 billion in the same quarter last year, but topped thirteen Wall Street analysts' consensus estimate $14.87 billion.
Pfizer's U.S. revenues for the quarter decreased 15 percent on falling Lipitor sales, while international revenues declined 5 percent from a year ago, primarily due to a stronger dollar.
Among main products, cholesterol drug Lipitor's revenues dropped 53 percent to $1.22 billion, while revenues from Lyrica increased 14 percent year-over-year.
Arthritis drug Celebrex revenue grew 6 percent and Prevnar 13/Prevenar 13 revenue rose 12 percent to $916 million from last year. Viagra for erectile dysfunction recorded a 2 percent decline in sales.
Meanwhile, animal health revenues grew 3 percent to $1.09 billion and consumer healthcare revenues increased 8 percent to $768 million from last year.
Pfizer has already agreed in April to sell off its nutrition businesses to Nestlé SA (NSTR.L, NSRGY.PK) for $11.85 billion, and is in the process of floating IPO for 20 percent of its animal health business that will be spun-off into a standalone company that will be called Zoetis.
"We anticipate filing a registration statement with the Securities and Exchange Commission by mid-August for a potential initial public offering (IPO) of up to a 20% ownership stake in Zoetis. If the IPO is successfully completed, which we are targeting for the first half of 2013, we will have a variety of options to achieve a potential full separation of Zoetis," Read added.
Looking ahead to fiscal 2012, Pfizer continues to expect earnings in a range of $1.23 to $1.38 per share and adjusted earnings in the range of $2.14 to $2.24 per share, on projected revenues between $58 billion and $60 billion.
Street is currently looking for full-year 2012 earnings of $2.21 per share on annual revenues of $59.97 billion.
The company said it has repurchased $1.3 billion of common stock during second quarter and continues to expect share repurchases of about $5 billion of common stock in 2012, with $3 billion repurchased through July 30.
PFE closed Monday's regular trading session at $23.71, down $0.08 on a volume of 25.79 million shares. In the past 52-week period, the stock has been trading in a range of $16.63 to $23.94.
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