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Pfizer Reports Third-Quarter 2013 Results

Pfizer Inc. (NYSE: PFE) reported financial results for third-quarter 2013. As a result of the full disposition of Zoetis (3) on June 24, 2013, the financial results of the Animal Health business are reported as a discontinued operation in the condensed consolidated statements of income for year-to-date 2013, and third-quarter and year-to-date 2012. Results and guidance are summarized below.

OVERALL RESULTS

               

($ in millions, except

per share amounts)

           
Third-Quarter Year-to-Date
2013     2012     Change 2013     2012     Change
Reported Revenues (1)

$ 12,643

   

$ 12,953

    (2%)

$ 38,026

   

$ 40,766

    (7%)
Adjusted Income (2) 3,859 3,754 3% 11,602 12,358 (6%)
Adjusted Diluted EPS (2) 0.58 0.50 16% 1.65 1.64 1%
Reported Net Income (1) 2,590 3,208 (19%) 19,435 8,255 *
Reported Diluted EPS (1) 0.39 0.43 (9%) 2.77 1.09 *
 

* Calculation not meaningful.

 

BUSINESS UNIT (4) REVENUES

($ in millions)

Favorable/(Unfavorable)

 

    Third-Quarter       Year-to-Date
2013     2012     % Change 2013     2012     % Change
        Total     Oper.         Total     Oper.
Specialty Care $ 3,349 $ 3,406 (2%)     (1%) $ 9,891 $ 10,483 (6%)     (4%)
Primary Care 3,259 3,610 (10%) (8%) 9,830 11,725 (16%) (14%)
Emerging Markets 2,431 2,389 2% 5% 7,466 7,308 2% 5%
Established Products 2,296 2,383 (4%) (1%) 7,033 7,865 (11%) (8%)
Consumer Healthcare 788 780 1% 1% 2,399 2,276 5% 5%
Oncology 407 329 24% 26% 1,178 940 25% 28%
Other (5) 113     56     *     * 229     169     36%     36%
Total $ 12,643     $ 12,953     (2%)     -- $ 38,026     $ 40,766     (7%)     (5%)
 

* Calculation not meaningful.

 

SELECTED ADJUSTED COSTS AND EXPENSES (2)

($ in millions)

(Favorable)/Unfavorable

 

    Third-Quarter       Year-to-Date
2013     2012     % Change 2013     2012     % Change
        Total     Oper.         Total     Oper.
       
Cost of Sales (2) $ 2,178 $ 2,213 (2%) 2% $ 6,601 $ 6,806 (3%) 1%
Percent of Revenues (2) 17.3% 17.1% N/A N/A 17.4% 16.7% N/A N/A
SI&A Expenses (2) 3,351 3,441 (3%) (1%) 10,079 10,753 (6%) (5%)
R&D Expenses (2) 1,625     1,841     (12%)     (12%) 4,764     5,074     (6%)     (6%)
Total $ 7,154     $ 7,495     (5%)     (3%) $ 21,444     $ 22,633     (5%)     (3%)
 
Effective Tax Rate (2) 27.6% 28.0% 27.4% 28.4%
 
 

2013 FINANCIAL GUIDANCE (6)

The ranges for certain components of the financial guidance have been narrowed as set forth below.

         
Adjusted Revenues (2)       $50.8 to $51.8 billion

(previously $50.8 to $52.8 billion)

Adjusted Cost of Sales (2) as a Percentage of Adjusted Revenues (2)       18.0% to 18.5%

(previously 18.0% to 19.0%)

Adjusted SI&A Expenses (2)       $14.2 to $14.7 billion

(previously $14.2 to $15.2 billion)

Adjusted R&D Expenses (2)       $6.3 to $6.6 billion

(previously $6.1 to $6.6 billion)

Adjusted Other (Income)/Deductions (2)       Approximately $400 million

(previously approximately $800 million)

Effective Tax Rate on Adjusted Income (2)       Approximately 28.0%
Reported Diluted EPS (1)       $3.05 to $3.15

(previously $3.07 to $3.22)

Adjusted Diluted EPS (2)       $2.15 to $2.20

(previously $2.10 to $2.20)

     

EXECUTIVE COMMENTARY

Ian Read, Chairman and Chief Executive Officer, stated, “Overall, I am very pleased with our continued and steady progress, on many fronts, to drive greater value for our shareholders. We continue to generate solid financial results on an operational basis, despite the impact of product losses of exclusivity and the ongoing expiration of the Spiriva collaboration in certain countries as well as the challenging operating environment. Within our innovative businesses, during third-quarter 2013, revenues from our Oncology business increased 26% operationally due to the continued strong performance of new products, primarily Inlyta and Xalkori in several major markets. In addition, other key patent-protected products performed well operationally, notably Lyrica, which grew 11%, and Celebrex, which grew 13%. With regard to recently launched products, Eliquis prescription trends continue to improve, and we recently began our direct-to-consumer campaign in the U.S.; in addition, Xeljanz continues to perform in line with our expectations.”

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