* Co raises 2018 adj. EPS forecast to reflect buybacks
* Xeljanz, Lipitor sales beat estimates (Adds details about R&D spending, updates share price)
July 31 (Reuters) - Pfizer Inc lowered its revenue forecast for this year, blaming the stronger dollar, and increased its planned spending on research and development, as the drugmaker works to launch new drugs to replace declining sales from its established products like Viagra.
Shares of Pfizer, which retreated from planned drug price increases earlier this month after criticism from U.S. President Donald Trump, rose 0.5 percent in early trading on Tuesday.
The company's second-quarter earnings topped Wall Street estimates. Excluding special items, Pfizer earned 81 cents per share, beating analysts' average estimate of 74 cents, according to Thomson Reuters I/B/E/S.
The company's rheumatoid arthritis drug, Xeljanz, reported sales of $463 million for the second quarter, beating consensus estimates of $432 million, according to brokerage SunTrust Robinson Humphrey.
Sales of cholesterol-lowering medicine Lipitor came in at $521 million, easily topping estimate of $466 million.
Still, Pfizer said it now expects 2018 revenue of between $53 billion and $55 billion, compared with a prior forecast of $53.5 billion to $55.5 billion, due to the strengthening dollar.
Pfizer deferred announced price hikes on about 40 of its drugs, after Chief Executive Officer Ian Read spoke with Trump.
Since then, other major drugmakers, including Merck & Co , Eli Lilly and Novartis, have announced drug price freezes until the end of the year or decreases on some products.
Net income rose 26 percent to $3.87 billion, or 65 cents per share, in the second quarter.
Revenue rose 4.4 percent to $13.47 billion, ahead of expectations of $13.31 billion. Revenue at its Essential Health unit, which includes its older products like Viagra, Lipitor and Xanax, fell 1 percent in the quarter to $5.19 billion.
The company raised its full-year adjusted earnings per share forecast to between $2.95 and $3.05, from $2.90 to $3.00 earlier.
Pfizer said the new forecast reflects $6.1 billion worth of share repurchases already completed in 2018.
It is also stepping up its R&D spending, and now expects to spend $7.7 billion to $8.1 billion this year. It had previously forecast $7.4 billion to $7.9 billion of R&D spending for the year. (Editing by Sriraj Kalluvila and Bill Trott)