Reuters Finance News
Pfizer Profits Soar on Strong Drug Sales
Jan 23 5:47pm ET
By Ransdell Pierson and Edward Tobin
NEW YORK (Reuters) - Pfizer Inc. , the world's largest drugmaker, on Wednesday posted a 21 percent rise in fourth-quarter operating earnings on stellar pharmaceutical sales, including cholesterol-fighter Lipitor, which Pfizer said is now the world's top-selling medicine.
Pfizer, with an industry-leading stable of prescription drugs that also includes impotence pill Viagra, reported earnings of $2.11 billion, or 34 cents per share, before unusual items.
The results were in line with a forecast earlier this month from Pfizer, one of the few large drugmakers not yet hit by patent expirations on key products. Analysts had expected a profit of 33 cents to 38 cents per share, with a mean of 34 cents, according to research firm Thomson Financial/First Call.
Net income for the quarter increased 38 percent to nearly $1.96 billion, or 30 cents per share, from $1.42 billion, or 23 cents per share, a year earlier. On a net basis, Pfizer faced an easier comparison because of lower merger-related costs in the quarter than in the year-ago period.
Revenues jumped 12 percent to $9.03 billion.
"Pfizer's results look good and are a tribute to the company's marketing strength. It has the biggest sales force out there and almost all its major products did better than we expected," said Prudential Securities analyst Tim Anderson.
Anderson said Pfizer's revenues came in $300 million higher than his forecasts. Viagra, with revenues up 9 percent to $415 million, was the only major drug that failed to exceed his projections.
Pfizer repeated its 2002 earnings forecast of $1.56 to $1.60 a share, up at least 19 percent from the $1.31, excluding special items, it earned in all of 2001. It also said it still sees revenues growing at a double-digit percentage clip through 2004, resulting in annual earnings per share growth of at least 15 percent, excluding merger-related items.
The company in 2000 acquired Warner-Lambert Co., which yielded Lipitor and epilepsy treatment Neurontin, as well as merger-related savings that have boosted earnings.
Sales of Lipitor rose 31 percent to $1.88 billion for the fourth quarter and reached $6.4 billion for the year. Neurontin increased 34 percent to $498 million during the quarter, while antidepressant Zoloft generated quarterly sales of $646 million, up 10 percent.
Norvasc, a treatment for high blood pressure, saw sales grow 4 percent to $962 million. Another key medicine, antibiotic Zithromax, rose 7 percent to $560 million.
Aside from robust sales of medicines already on the market, the company's pipeline of experimental drugs is regarded as one of the strongest in the industry, featuring an inhaled form of insulin for diabetes patients and a new anti-epilepsy drug.
Other major drugmakers such as Merck & Co. Inc. and Bristol-Myers Squibb Co. have been hit by patent expirations on key drugs, dragging down sales as those drugs face generic competition.
But Prudential's Anderson said Pfizer, with no major patent issues, has a lineup of drugs not under threat from cheaper copycats sold by generic drugmakers.
"That lack of generic exposure gives Pfizer more earnings security than almost any other drugmaker. And it has a great management team that knows how to run its business," Anderson added.
The company's consumer business -- which sell Listerine mouthwash, Schick razors and over-the-counter (nonprescription) allergy treatments Benadryl and Sudafed -- saw sales rise 5 percent to $1.4 billion. Revenues from its animal health unit rose 3 percent to $301 million.
In a conference call with analysts, Pfizer Chief Executive Officer Hank McKinnell said the consumer health unit could grow by selling medicines that lose their patent protection and are later approved for over-the-counter sale, including drugs developed by other companies.
Shares of Pfizer closed up $1 to $41.80, or 2.5 percent, on the New York Stock Exchange.
They have remained relatively steady since May 1998, trading between $30 and $46 for almost all of that time. |
