Updated from 1:01 p.m. EDT

Shares of

Pfizer

(PFE) - Get Report

skidded Wednesday as analysts spent more time worrying about weaker-than-expected third-quarter revenue and the absence of 2005 financial guidance than they did cheering about its Wall Street consensus-beating earnings.

"Light revenues and nebulous 2005 guidance could weigh on the stock," said James Kelly of Goldman Sachs, in a Wednesday research report. Although Pfizer's third-quarter EPS of 55 cents beat Kelly's estimate and the consensus prediction by a penny, the $12.8 billion in revenue came in well below Kelly's prediction of $13.3 billion and the Thomson First Call consensus of $13.23 billion.

Kelly, who has an outperform rating on Pfizer, issued his comments before Pfizer held a midafternoon telephone conference with analysts and investors. "Our estimates are under review," said Kelly.

He was responding to Pfizer's early morning comments that it faced pricing pressures, new brand-name drug competition, generic drug competition, "difficult political, legal and regulatory environments" and the impact of "less-favorable-than-expected foreign exchange rates."

Henry McKinnell, Pfizer's chairman and CEO, said in a news release that "these challenges are being addressed," adding that although Pfizer expects these issues "to temper revenue and income growth in 2005, Pfizer's long-term prospects remain strong."

Kelly said he will need considerable clarification on the tempering of revenue and income growth. Otherwise, his current economic model suggests 9% EPS growth next year, "which would be the lowest level in many years." (He doesn't own shares; his firm has an investment banking relationship with Pfizer.)

Pfizer's stock lost 63 cents, or 2.2%, to $28.37, which is uncomfortably close to the 52-week low of $27.68.

Jami Rubin, of Morgan Stanley, told clients Wednesday that the "disappointing revenue performance" was offset by healthy gross profit margins leading to a "stronger-than-expected quarter." Rubin, who has an equal-weight rating on the stock, said the absence of 2005 guidance "underlies our concerns about the company's ability to generate above-average growth, particularly on the top line, over the next few years." (Rubin owns shares of Pfizer; Morgan Stanley has an investment banking relationship with Pfizer).

Even after the afternoon conference call, Pfizer watchers will have to be content with waiting until the first quarter 2005 financial analysts' meeting to get a clearer picture of next year's finances from the company. David Shedlarz, the chief financial officer, said it was too early in the corporate planning process to provide a forecast for 2005. Despite the many financial challenges, Pfizer "will continue to make the investments necessary to sustain strong longer-term growth," he said.

Shedlarz added that Pfizer's "operating expense flexibility and capacity to achieve additional cost efficiencies will further improve prospects for income growth" next year.

Pfizer's third-quarter earnings rose 49% from a year ago, reflecting a roughly commensurate decline in selling expenses attributable to its merger with Pharmacia. On an adjusted basis, earnings rose 15% to 55 cents a share, a penny better than estimates.

Pfizer earned $3.34 billion, or 44 cents a share, in the three months to Sept. 30, compared with $2.24 billion, or 29 cents a share, last year. Both quarters reflected numerous non-operating items related to the Pharmacia merger. Revenue rose 4% to $12.83 billion.

Looking ahead, Pfizer reiterated its full-year earnings forecast of $2.12 to $2.14 a share, which compares with a Thomson First Call consensus of $2.12 a share. On a GAAP basis, he said the full year EPS would be in the range of $1.58 to $1.60. While refusing to provide earnings guidance for 2005, the company noted that products with U.S. sales in the 12 months to September 2004 that total $5 billion face lost marketing exclusivity. The impact will be "substantial," the company said.

The company said its third-quarter revenue growth was aided by the cholesterol drug Lipitor, the arthritis and pain reliever drugs Celebrex and Bextra and the weakening of the U.S. dollar relative to other currencies. Lipitor's sales grew 11% to $2.74 billion; Celebrex was up 14% to $797 million; Bextra gained 37% to $324 million; and the epilepsy drug Neurontin posted a 10% revenue gain to $764 million.

But Neurontin is now facing generic competition, and Pfizer recently announced it was selling its own generic version of Neurontin as it fights several generic drug companies in court.

Celebrex and Bextra are COX-2 inhibitors, the same class of drug as Vioxx, which

Merck

(MRK) - Get Report

pulled from the market Sept. 30 after research showed that long-term use of the drug raised the risk of cardiovascular problems.

Although Pfizer has defended the safety of its COX-2 franchise, it also is conducting tests to assess the drugs' long-term cardiovascular effects.

Pfizer recently said two clinical trials of patients who had undergone coronary artery bypass graft surgery showed "an increase in cardiovascular events" in patients receiving Bextra alone or in combination with an experimental Pfizer COX-2 drug called parecoxib. The first study was published last year and the second study was recently completed. Bextra is not approved for use in any surgical setting in the U.S.

Its popular erectile dysfunction drug, Viagra, continues to suffer amidst competition. The impotence medication's total revenue fell 15% to $403 million for the third quarter. Its U.S. performance was even worse -- down 23% to $217 million. Still, Pfizer said the drug has "responded well to market challenges," retaining a 70% dollar market share worldwide.

Pfizer maintained that sales of competing impotence drugs have plateaued. "Consumer curiosity understandably drove initial experimentation among" the newer drugs, Cialis, from

Icos

(ICOS)

and

Eli Lilly

(LLY) - Get Report

, and Levitra, from

GlaxoSmithKline

(GSK) - Get Report

and

Bayer

(BAY)

.

Among other major products, Pfizer noted that Zoloft remains the world's top-selling antidepressant, despite "recent challenges" such as the general sales slowdown among peer pills "due to government and media attention" to the use of antidepressant by children and adolescents.

Last week, the Food and Drug Administration ordered that all antidepressants carry a "black box" warning -- the strongest drug label warning -- regarding research indicating these drugs can increase the risk of suicidal thoughts and behavior among young patients.

The FDA hasn't approved Zoloft as a treatment for childhood depression, but doctors are allowed by law to prescribe an "off label" use of the drug if they believe a young patient will benefit from it. Only Prozac, made by

Eli Lilly

(LLY) - Get Report

, has received FDA approval for treating depression in youngsters.

The FDA pointed out that it found no suicides among the clinical studies of the nine antidepressants -- including Zoloft -- that it reviewed on its way to ordering the black box warning. Pfizer said it is "supportive of the FDA's efforts to provide useful clinical information" for a "serious public health issue." Zoloft's revenue dropped 3% to $802 million in the third quarter.

The company added that its acquisition of Pharmacia is still paying cost-saving dividends. "Expense synergies associated with Pfizer's acquisition of Pharmacia will continue to contribute to growth in 2005, but to a lesser degree than in 2004," Pfizer said. It said such synergies will increase from $1.3 billion in 2003 to about $3.5 billion in 2004 and to about $4 billion in 2005. Pfizer acquired Pharmacia in 2003.

Analysts say the next big event that could provide insight to Pfizer's future is a Nov. 30 meeting in which the company will discuss its research activities. "Given the size of Pfizer, investors need a comprehensive portfolio update to better assess the company's long-term growth potential," said David. R. Risinger, of Merrill Lynch, in a Wednesday morning research note. "And investors need more evidence that the company can offset patent-related EPS pressures in the latter part of the decade." (Risinger has a buy recommendation on the stock. He doesn't own shares; his firm has an investment banking relationship.)

"Our portfolio is strong," said Karen Katen, president of Pfizer Global Pharmaceuticals. "While our environment is tough, we're tougher."