Pfizer said Wednesday quarterly earnings more than doubled on higher sales of its prescription drugs and lower expenses, but its Chantix quit-smoking drug lost more than a third of its U.S. sales amid safety concerns.
The company earned $2.78 billion, or 41 cents per share, in
the second quarter. That compared with $1.27 billion, or 18 cents per share, a year earlier, when Pfizer took large charges for restructuring and merger-related costs.
Excluding special items, Pfizer earned 55 cents per share. Analysts on average expected 54 cents per share, according to Reuters Estimates.
Company revenue rose 9 percent to $12.13 billion, but would have increased only 2 percent if not for the weak dollar, which boosts the value of overseas sales when converted back into U.S. currency. Reuters Estimates had expected revenue of $11.47 billion.
The world's largest drugmaker reaffirmed it expects earnings this year to grow as much as 11 percent, due largely to a cost-cutting program that has cut 25,000 jobs, or 23 percent of the company's work force, since late 2004. It said the company is on track to reduce costs by the end of the year at least $1.5 billion to $2 billion, compared with 2006.
"Pfizer beat on the bottom line obviously and beat on the top line" during the quarter, said Deutsche Bank analyst Barbara Ryan. "Their guidance clearly is being reiterated so everything is on track," she said, attributing the good quarterly results largely to benefits of its cost-cutting program.
Pfizer has vowed to protect its industry-topping dividend, whose $8 billion-a-year cost to Pfizer is roughly equivalent to the company's annual net income.
Even though the generous dividend keeps many investors faithful to Pfizer, company shares have lost more than a fourth of their value in the past year, compared with about a 13
percent decline for the American Stock Exchange Pharmaceutical Index of large U.S. and European drugmakers.
Pfizer's shares are now trading at 11-year lows, sapped by the company's failure to come up with enough big new medicines to replace those facing generic competition.
The company's U.S. sales fell 2 percent in the quarter, hurt by waning demand for Chantix, a medicine approved in mid-2006 that Pfizer had been counting on to help drive earnings growth in coming years. But the company in January said the drug would begin carrying a warning that it may cause agitation, depression and suicidal behavior, raising doubts about its future growth prospects.
Global sales of Chantix, sold as Champix overseas, rose 3 percent to $207 million, but plunged 35 percent to $109 million in the United States.
Second-quarter results were also hurt by U.S. loss of patent protection on allergy drug Zyrtec, which Pfizer no longer sells, and generic competition for cancer drug Camptosar, whose global sales fell 43 percent to $137 million.
But many of Pfizer's biggest drugs fared well, helped by price increases earlier in the year.
Global sales of cholesterol fighter Lipitor, the world's top-selling medicine, jumped 9 percent to $2.98 billion, given a boost by growing concerns about the value of Vytorin, a more potent rival drug sold by Merck and Schering-Plough .
Lyrica, used to treat nerve pain and recently also approved to treat fibromyalgia, soared 52 percent to $614 million. Sales of arthritis drug Celebrex rose 23 percent to $589 million, in
a continuing rebound for the medicine following earlier sales declines linked to safety concerns.
Sales of anti-impotence treatment Viagra rose 21 percent to $463 million despite strong competition from Eli Lilly's longer-acting Cialis brand.