Stock Market Update - Thu Oct 18 08:25:57 EDT 2007
Dow component Pfizer (PFE 24.55) reported a sharp drop in third quarter earnings, hurt by a $2.8 billion charge related to its decision to stop investing in inhaled insulin drug Exubera. The latest results were also weighed down by lower sales of cholesterol drug Lipitor and increased generic competition for many of Pfizer's other products, including Zoloft and Norvasc.
For the third quarter, Pfizer earned $761 million, or $0.11 per share, compared with $3.36 billion, or $0.46 per share, in the year ago period. However, excluding one-time charges, adjusted earnings were $0.58 per share - six cents better than analysts' forecast. Reflecting lower sales of Lipitor and the loss of U.S. exclusivity for Zoloft and Norvasc, revenues slipped 2.4% year/year to $1.99 billion, versus the consensus estimate of $11.72 billion.
On the top line, worldwide pharmaceutical sales were down 4% from a year ago. In-line and new products revenue increased 5%, while revenues for products facing generic competition, Zoloft and Norvasc, fell 54% in the quarter. Sales of Lipitor, meanwhile, fell 5% to $3.2 billion, as a 13% drop in the U.S. offset a 9% increase in international markets.
For fiscal 2007, Pfizer, which continues to push the development of new products to contend with mounting generic pressure and industry-wide challenges, raised the low end of its guidance, with earnings now expected to be between $2.10 and $2.15 per share on revenue in a range of $47.5 to $48 billion. It previously expected earnings of $2.08 to $2.15 per share on revenue of $47 to $48 billion. Currently, analysts are looking for a full-year profit of $2.12 per share and revenue of $47.4 billion.
