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Pfizer beats profit forecasts on higher sales, lower taxes

Published:Wednesday | May 4, 2016 | 12:00 AM

Pfizer easily beat Wall Street expectations as the biggest United States drugmaker's first-quarter net income jumped 27 per cent due to higher sales, a lower tax bill and some one-time gains.

The company raised its 2016 financial forecasts, citing the strong quarter and an improved business outlook.

Just four weeks after dropping its record US$160 billion deal to buy fellow drugmaker Allergan Plc and move its headquarters on paper to Ireland to reduce its taxes, New York-based Pfizer Inc surprised investors with the better-than-expected results and profit forecast.

The company had made a big bet on the Allergan deal, saying it was needed to make Pfizer more competitive with European rivals who face lower tax rates. Pfizer now says it will concentrate on operational efficiency, internal and external product development, and "shareholder-friendly capital allocation" in the near term, while deciding by year's end whether to sell or spin off its established products business, which sells older, mostly off-patent drugs.

Some analysts and investors have been pushing Pfizer for years to separate that business to accelerate growth, which the company until now has been trying to achieve with acquisitions and through more partnerships to develop new medicines.

On Tuesday, Pfizer reported first-quarter net income of US$3.02 billion, or 49 cents per share. That was up from US$2.38 billion, or 38 cents per share, in 2015's first quarter, despit higher spending on product manufacturing, marketing and administration.Excluding one-time items, adjusted profit was 67 cents per share, 12 cents better than analysts expected.

The maker of Viagra and pain treatment Lyrica posted revenue of US$13.01 billion, up 20 per cent and above the US$11.97 billion analysts expected.