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Pfizer 3Q Profit Falls 70 Percent

Tue, 11/02/2010 - 4:28am

NEW YORK (AP) — Pharmaceutical giant Pfizer Inc. said Tuesday that revenue in the third quarter jumped 39 percent due to its acquisition of fellow drugmaker Wyeth, but hefty charges related to that $68 billion purchase dragged its profit down 70 percent.

The New York-based maker of cholesterol blockbuster Lipitor and impotence pill Viagra says net income was $866 million, or 11 cents per share. That's down from $2.88 billion, or 43 cents per share, a year earlier.

Excluding one-time items, net income would have been $4.37 billion, or 54 cents per share. That topped Wall Street expectations by 3 cents.

One-time items included $1.48 billion for asset writedowns related to buying Wyeth and $499 million in restructuring, plus a $701 million charge for asbestos litigation related to a Pfizer subsidiary, Quigley Co.

Revenue came up short of that mark at $16.17 billion. Analysts were expecting, on average, revenue of $16.68 billion. But that was up from $11.62 billion in the third quarter of 2009.

Pfizer raised its 2010 profit forecast, to a range of $2.17 to $2.22 per share, from the prior guidance of $2.10 to $2.20 per share. Analyst expect $2.22 per share.

Sales of prescription drugs, Pfizer's biggest division, jumped 31 percent to $13.95 billion, with the new products from Wyeth such as biologic drug Enbrel for rheumatoid arthritis, Prevnar vaccine against ear and blood infections, and Premarin hormone replacement pills.

Lipitor sales were down 11 percent at $2.53 billion, as competition from generic versions of other cholesterol drugs such as Zocor continues to erode sales. Lipitor, the world's top-selling drug, loses patent protection in November 2011, and its sales are expected to fall sharply after that. Still, Pfizer reaffirmed its financial guidance for the following year, saying it expects 2012 sales of $65.2 billion to $67.7 billion and earnings per share, excluding one-time items, of $2.25 to $2.35.

Other top sellers were Enbrel, at $799 million; Prevnar and a successor vaccine that prevents more strains of pneumococcal disease, with a combined $914 million; and pain treatment Lyrica, up 7 percent at $757 million. Sales were down for Viagra, anti-inflammatory pain reliever Celebrex and blood pressure drug Norvasc.

Sales of veterinary medicines rose 27 percent to $860 million and revenue from Capsugel, which makes capsules for oral medicines and dietary supplements, were flat at $176 million. Pfizer is considering selling that unit.

Pfizer also reported sales of $673 million from consumer health products such as Chap Stick and Centrum vitamins, and $441 million from nutrition products. Those divisions both came from the Wyeth purchase.

Noting it's been just over a year since the Wyeth deal closed, Pfizer Chief Executive Jeffrey Kindler said in a statement, "I am particularly pleased with the speed of the integration, the cost synergies achieved to date as well as our solid financial performance this quarter and year to date in this difficult economic environment. This combination clearly creates value for our shareholders."

In premarket trading, Pfizer shares changed hands at $17.53, down 9 cents from Monday's close of $17.62.

For the first nine months, net income was $5.37 billion, or 66 cents per share, down from $7.87 billion, or $1.16 per share in the January-September period of 2009. Revenue jumped 50 percent to $50.25 billion, thanks to the addition of sales of Wyeth products.

In premarket trading, shares of Pfizer slipped 2 cents to $17.60 from Monday's close of $17.62.

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