Wed | Dec 13, 2017

Pfizer beats profit forecast on lower charges, higher sales

Published:Wednesday | November 1, 2017 | 12:00 AM
A woman walks into the Pfizer Inc world headquarters building in New York City.

Pfizer doubled its third-quarter profit, thanks to slightly higher sales, lower one-time charges and reduced spending on production and administration. The drug giant edged past Wall Street's profit expectations and improved its 2017 financial forecast.

The maker of Viagra and pain treatment Lyrica on Tuesday said it will decide next year whether to sell or spin off its consumer health business, which sells products including Chapstick, Centrum vitamins and Advil pain reliever.

Some analysts have been expecting Pfizer to make an acquisition, its primary growth strategy, but earlier this month, Pfizer said it's considering whether to keep or divest the business.

The New York company has been down this road before. In 2006, it sold a stable of popular consumer products including Listerine, Nicorette, Visine, Sudafed and Neosporin to rival Johnson & Johnson for US$16.6 billion. Many analysts called that move a mistake. Just three years later, Pfizer ended up back in the consumer business with Advil, Anacin, Preparation H and other well-known brands when it bought rival drugmaker Wyeth for US$68 billion.

In the latest period, Pfizer Inc reported third-quarter profit of US$2.84 billion, or 47 cents per share, up from US$1.36 billion, or 22 cents per share, in 2016's third quarter.

Excluding one-time items, net income came to US$4.06 billion, or 67 cents per share. That was two cents more than analysts expected.

The drugmaker boosted revenue 1 per cent to US$13.17 billion, which met forecasts.

"We view these results as refreshingly boring and, given how biopharma stocks have reacted this quarter to disappointing results or product announcements, we think boring is a good thing right now," Credit Suisse analyst Vamil Divan wrote to investors.

Over the past week, drugmakers Bristol-Myers Squibb Coompany, Celgene Corp and Merck & Company have seen their stocks drop for reasons, including weak third-quarter results and disappointing financial forecasts.

Meanwhile, Pfizer posted higher sales for most of its key new drugs, including cancer medicines Ibrance and Xtandi, Xeljanz for rheumatoid arthritis and Eliquis for preventing strokes and blood clots. Top seller Prevnar, a vaccine against ear, bloodstream and other pneu-mococcal infections acquired in the Wyeth deal, saw sales dip 1 per cent to US$1.52 billion, but overall the company's key segment selling newer, patent-protected medicines posted an 11 per cent increase in revenue, to US$8.12 billion.

Sales of older drugs facing generic competition in various countries fell 12 per cent to US$5.05 billion.

Consumer health sales rose 4 per cent to US$829 million. They totalled US$3.41 billion in 2016.

Pfizer now expects full-year earnings in the range of US$2.58 to US$2.62 per share, slightly better than its August forecast for US$2.54 to US$2.60 per share. It expects revenue of US$52.4 billion to US$53.1 billion, versus US$52 billion to US$54 billion in its prior forecast.

In premarket trading, Pfizer shares dipped 16 cents to US$34.97.

- AP