Pfizer's Plan Comes Together
Updated from 1:25 p.m. EDT
Pfizer's (PFE) second-quarter financial results beat Wall Street's estimates, and the company provided no financial shocks, but executives also indicated that job cuts would be coming soon as part of a previously announced restructuring.
Henry McKinnell, the chairman and CEO, told analysts during a telephone conference that Pfizer was able to show a gain in revenue despite generic competition for several drugs, the withdrawing of the arthritis drug Bextra and the "rebuilding" of sales for the arthritis drug Celebrex.
He reiterated that he expects Pfizer to post double-digit earnings-per-share growth in 2006 and even greater double-digit profit growth in 2007."I love it when a plan comes together," said McKinnell, citing the signature comment from Col. Hannibal Smith in the 1980s television show The A-Team. The pharmaceutical giant earned $3.46 billion, or 47 cents a share, in the quarter, compared with $2.86 billion, or 38 cents a share, last year. The difference was primarily attributable to taxes, where the company reported a $413 million benefit in the 2005 quarter compared with a $582 million expense last year. Adjusted for a host of items, earnings were $3.42 billion, or 46 cents a share, in the latest quarter, beating the consensus estimate by 2 cents, according to Thomson First Call. Sales rose 1% from a year ago to $12.43 billion, compared with estimates of $12.15 billion. Pfizer's cost of sales rose 19% from a year ago to $2.08 billion. "Overall this quarter was in good shape with no major surprises," Tim Anderson of Prudential Equity Group wrote in a research note. Pfizer's shares were up modestly for much of the day, but by late afternoon the stock had lost 24 cents to $27.14 on greater than average trading.
Reducing ExpensesThe company did alter its forecast, revising its full-year revenue prediction to "a modest decline" vs. 2004 rather than the previous estimate that revenue would be unchanged.
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