Despite the Exubera dismissal and loss of patent exclusivity,
beat Wall Street expectations Wednesday morning and provided a 2008 outlook in line with, and to some extent above, analysts' predictions. The mega drugmaker saw top-line benefits of favorable exchange rates and bottom-line relief from continued cost-cutting.
Shares of the company, which slashed headcount by 11,000 and bought back $10 billion in stock in 2007, were trading down 20 cents, or 0.9%, at $22.43 in recent trading Wednesday morning.
For the fourth quarter, Pfizer reported adjusted earnings of $3.6 billion, or 52 cents a share, on revenue of $13.1 billion, vs. $3 billion, or 43 cents a share, on revenue of $12.6 billion on the same basis in the year-ago quarter. Analysts surveyed by Thomson Financial were looking for 47 cents a share on revenue of $12.19 billion.
For the year, the company reported earning $8.3 billion, or $1.20 a share, vs. $19.3 billion, or $1.20 a share, in 2006. Keep in mind, results from the prior year benefited from an after-tax gain of $7.9 billion tied to the sale of its Consumer Healthcare business, while 2007 included after-tax charges of $2.1 billion related to write-offs in light of Pfizer's decision to dump inhaled insulin Exubera.
Adjusted earnings per share were positively impacted by Pfizer's purchase of $10 billion of its stock in 2007, including $2.5 billion in the fourth quarter.
Annual revenue increased just 1% to $48.6 billion, vs. $48.4 billion the year prior -- and favorable impact of foreign exchange contributed $1.5 billion, or 3%, to revenue. Pfizer said the loss of exclusivity of Norvasc and Zoloft led to a $3.4 billion decline in sales in 2007, as revenue for the two products declined 49% year over year.
The drugmaker told investors not to expect meaningful revenue growth to resume until 2009 when sales of newer drugs will fill in for other patent-loss pains.
Quarterly sales of the company's cholesterol-lowering Lipitor increased just 3% over the comparable 2006 period, while annual sales of the drug fell 2% to $12.7 billion. "The U.S. statin market in particular continues to be highly competitive, with both branded and generic competition in an increasingly cost-sensitive environment," the company said in a release.
Sales of Pfizer's arthritis drug Celebrex increased 18% to $637 million in the fourth quarter year over year, and 12% to $2.3 billion for the year compared to 2006.
Pfizer's non-nicotine smoking-cessation drug Chantix (launched in 2006) brought in $883 million in 2007 compared with $101 million in 2006, the year it was launched. And the company's Lyrica, recently approved for fibromyalgia, saw a 60% year-over-year increase in fourth-quarter sales to $564 million, and a 58% increase to $1.8 billion in 2007 from 2006.
Looking ahead, the company expects adjusted earnings of $2.35 to $2.45 a share ($1.78 to $1.93 on a non-adjusted basis) on revenue of $47 billion to $49 billion in 2008. Analysts surveyed by Thomson Financial were looking for $2.34 a share on revenue of $47.1 billion for the year.