Pfizer Falls Short of Profit Targets

Increased generic-drug competition weighs on first-quarter earnings.
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(PFE) - Get Report

missed Wall Street estimates Thursday amid generic-drug pressures and declining sales of its multibillion-dollar drug Lipitor, but the Big Pharma reaffirmed its 2008 guidance.

Shares fell 74 cents, or 3.5% to $20.36 in morning trading.

The New York-based company said Thursday that it earned $2.78 billion, or 41 cents a share, in the recent quarter, down from $3.3 billion, or 48 cents a share, in the year ago quarter. On an adjusted basis, net income fell to $4 billion, or 61 cents a share, from $4.8 billion, or 68 cents a share, in the 2007 period. Revenue declined to $11.8 billion from $12.4 billion in the quarter.

Results were short of the consensus estimate offered by analysts surveyed by Thomson Financial. They were looking for earnings of 66 cents a share on roughly $12 billion in revenue.

Pfizer said declines in revenue were mainly attributable to the loss of U.S. exclusivity for Norvasc and Zyrtec. Those two drugs alone accounted for a combined $900 million decrease in revenue during the first quarter.

Pharmaceutical revenue altogether decreased 6%, including a 7% decrease in worldwide sales of cholesterol-lowering drug Lipitor to $3.1 billion. This included an 18% decrease of sales of the drug in the U.S.

Of Pfizer's smaller drugs, anti-inflammatory Celebrex saw revenue edge up just 2% year over year to $611 million. But Lyrica revenues increased 47% to $582 million, with strong growth in fibromyalgia.

Newer product, cancer treatment Sutent saw sales of $190 million, and smoking-cessation drug Chantix resulted in $277 million in first-quarter revenue.

Looking ahead, the company reaffirmed expectations for adjusted earnings of between $2.35 and $2.45 a share on revenue of between $47 billion and $49 billion. The guidance is in line with expectations of analysts surveyed by Thomson Financial who have pegged $2.39 a share on revenue of $48.3 billion.