Pfizer Tops Street Estimates As Pharma Pdt Growth Continues
By Melanie Trottman
NEW YORK (Dow Jones)--Pfizer Inc.'s (PFE) fourth-quarter earnings and revenue blew past Wall Street estimates as strong sales growth of a mix of pharmaceutical products continued.
The New York drug giant reported diluted earnings per share of 54 cents, a 42% increase from a year earlier and 2 cents higher than First Call Corp.'s consensus estimate. The 54-cent figure excludes unusual items, the financial results of the Medical Technology Group and the gain from its divestiture.
Worldwide sales of Viagra, the impotence drug launched in the U.S. last April, added $236 million to sales in the quarter, in part due to a number of international launches.
But Norvasc, a drug for the treatment of hypertension and angina, was the biggest contributor, with worldwide sales of $719 million, up 15% from a year earlier.
Other products also turned in double-digit sales growth. Zoloft, a drug for depression, obsessive-compulsive disorder and panic disorder, garnered worldwide sales of $489 million, up 24% from a year earlier, while the antibiotic Zithromax raked in sales of $379 million, up 42%. Sales of Zyrtec, an anti-allergy medicine, rose 54% to $109 million while sales of Cardura, a treatment for hypertension and enlarged prostate, rose 14% to $185 million.
Analysts said the drug sales, which fueled a 31% year-over-year increase in worldwide pharmaceutical revenues, are an indication that Pfizer's earnings aren't driven by just one or two key products.
"I think it showed the breadth of the portfolio here," said PaineWebber Inc. analyst Jeffrey Chaffkin, who said that excluding Viagra, sales of all the drugs beat his estimates.
"We were looking for closer to $300 million" in worldwide Viagra sales, he said.
But Viagra sales didn't disappoint Gruntal & Co. analyst David Saks, who said sales of the drug are still strong amid concerns by some that the drug was dying.
Overall, Pfizer beat PaineWebber's quarterly revenue estimate by more than $200 million, Chaffkin said.
Total revenue rose 26% in the quarter to $3.87 billion from $3.07 billion a year earlier. Excluding the negative effect of foreign exchange, revenue rose 28%.
In afternoon trading Tuesday, shares of Pfizer were up 3/8, or 0.3%, at 116 5/16 on volume of 3 million, compared with average daily volume of 3.2 million. Earlier, the shares traded as high as 118 3/8.
(Corrected 5:15 PM)
U.S. pharmaceutical revenue accounted for most of the growth in Pfizer's Pharmaceuticals Group, rising 38% to $2.06 billion. International pharmaceutical revenue rose 23% to $1.3 billion, or 27% excluding the effect of foreign exchange.
Observers said the hefty 83% increase in Pfizer's fourth-quarter alliance revenue, which is received from the co-promoted products Lipitor and Aricept, was greater than expected. Alliance revenue totaled $299 million, but ABN AMRO Inc. analyst Jim Keeney had expected $250 million. Keeney also noted the company's tax rate in the quarter was lower than a year earlier.
Not every sector at Pfizer had growth in the quarter. Sales in the company's Animal Health business fell 3% to $385 million, hurt by a weak livestock market in the U.S. and poor Asian economies. The decrease was 1% excluding foreign exchange impact.
Sales also decreased in the Consumer Health Care segment, falling 2% to $94 million. The sales would have risen 6% excluding the effect of foreign exchange.
On average, analysts said they expect Pfizer to achieve 25% growth in earnings per share in 1999. The estimates ranged from $2.50 a share to $2.60.
Key things to watch for this year are the launch of Celebrex, the recently approved rheumatoid arthritis drug, and the rollout of Viagra in Japan. Celebrex will be co-promoted by Monsanto Co.'s (MTC) G.D. Searle & Co. unit. Both launches could substantially add to earnings, but the company will have to spend to support the launches, observers noted.
Even senior vice president and chief financial officer David Shedlarz said Pfizer's challenge continues to be "striking the right balance between growth and investment."
In the fourth quarter, research and development expenses rose 29% to $698 million from $540 million a year earlier. |
