Pfizer hits Q1 mark, falls on weak Viagra sales
By Ransdell Pierson
NEW YORK, April 15 (Reuters) - Pfizer Inc. <PFE.N> said on Thursday that profits rose 18 percent in the first quarter, but its stock was pounded after the U.S. drugmaker reported slumping sales of its impotence drug Viagra.
Shares of the New York-based Pfizer sank $14.25 to $130.375 on the New York Stock Exchange, also because of Wall Street disappointment over Pfizer's expectations for full-year profits.
Earlier Thursday, Pfizer posted profits of $815 million, or 62 cents per diluted share in the first quarter, compared to $692 million, or 53 cents, a year ago.
Pfizer's per-share results matched the consensus estimate of analysts polled by First Call Corp.
The profit gains were fueled by strong sales of newer drugs such as antibiotic Trovan and popular co-promoted products including anti-cholesterol agent Lipitor and arthritis treatment Celebrex.
Older key drugs such as Norvasc and Procardia XL, which both treat hypertension, helped boost global drug sales 33 percent to $3.64 billion.
Viagra, launched in April 1998, had first-quarter 1999 sales of $193 million, down 18 percent from fourth quarter 1998 revenues of $236 million.
"Pfizer's stock is getting punished today, and it basically comes down to Viagra. It's not doing as well as last year's initial hype suggested," said Mike Krensavage, an analyst for Brown Brothers Harriman & Co.
Krensavage said he had been counting on Viagra to post first-quarter sales of $275 million. Viagra's introduction made front-page news globally, helping the blue diamond-shaped pill make history as the fastest-selling new drug ever.
But sales peaked within two months and then plateaued as pent-up demand was met, and safety concerns arose over scores of deaths among users.
"There was a lot of curiosity about Viagra among many men who apparently didn't need the drug after all, and in whose nightside tables the pills probably remain unused," Krensavage said. Still, he predicted the drug would achieve blockbuster sales of $1.3 billion this year.
Pfizer said total revenues jumped 29 percent to $3.93 billion, with changes in foreign exchange rates adding 0.3 percent to sales growth -- a favorable turnaround from the 1998 quarter, when a stronger U.S. dollar trimmed global sales by 4.5 percent.
"It was a great quarter for Pfizer," said Carl Seiden, a J.P. Morgan drug analyst, who added that total drug sales were better than he had forecast.
Pfizer said it was comfortable with the "current range" of 1999 analyst earnings estimates from $2.40-$2.50 per diluted share, a gain of 20-25 percent over last year.
The First Call consensus estimate had been $2.49. "So Pfizer is actually driving down earnings expectations to a lower range, another reason investors are expressing concern today," Krensavage said.
Pfizer cautioned that second-quarter per-share earnings growth would be held to the single digits, with growth crimped by a 23 percent boost in research and development spending to $2.8 billion this year.
Seiden theorized the biggest reason for today's selloff was not because of Viagra, but over disappointment with expected second-quarter earnings growth.
"But in terms of the whole year of 1999, nothing has really changed," Seiden said, adding that the 20-25 cent earnings growth promised by Pfizer was within the ballpark of analyst hopes. |
