Pfizer Edges Past Estimates

Updated from 11:21 a.m. EST

Pfizer(PFE Quote) said Monday that fourth-quarter and full-year earnings narrowly beat Wall Street estimates.

Jeffrey Kindler, the chairman and CEO, said that although Pfizer achieved "nearly all of our financial targets" last year, "we continue to face a difficult operating environment" due to generic competition and "the risks inherent in drug development."

The latter comment referred to the December announcement that Pfizer was halting work on a cholesterol drug that the company and analysts had expected to be a successor to Lipitor, the world's best-selling drug.

The failure of the drug, which combined Lipitor and the experimental torcetrapib, "brought into sharper focus the need to transform Pfizer over time to succeed in a dynamic healthcare marketplace," Kindler said in a prepared statement.

Lipitor fell just below the company's aggressive goal of $13 billion in sales for 2006, producing $12.89 billion, a 6% gain over 2005. However, during the fourth quarter, worldwide sales slipped by 1% to $3.34 billion as U.S. sales fell by 6%. Lipitor is experiencing competition not only from several brand-name cholesterol drugs but also from a growing number of generic versions of Merck's(MRK Quote) Zocor.

Another closely watched drug, the arthritis drug Celebrex, recorded yearly sales of $2.04 billion and narrowly topped the $2 billion Pfizer had predicted. The company said it would resume direct-to-consumer advertising during the second quarter subject to approval by the Food and Drug Administration. The ads will address potential heart risks of a medication that belongs to the same drug as Vioxx, which Merck withdrew in September 2004.

The earnings report preceded by several hours the company's announcement of a restructuring that will cost 10,000 jobs - including 2,200 U.S. salesforce firings late last year - and save $1.5 billion to $2 billion by the end of 2008.

For the fourth quarter, Pfizer earned 43 cents a share, one penny higher than the Wall Street consensus, when special items are excluded. Fourth-quarter sales of $12.6 billion beat the average prediction of $12.2 billion from analysts polled by Thomson First Call.