Pfizer Meets Estimates, Cuts Second-Quarter Growth Rate

Profits rose 22% year over year, but costs will cut next quarter's growth.

Author:: Adam Feuerstein
Publish date:: Apr 17, 2002 10:18 AM EDT

Pfizer

reported Wednesday that first-quarter operating profits rose 22%, bolstered by strong drug sales. But the world's largest drugmaker warned that second-quarter earnings would not meet current Wall Street expectations because of higher costs.

New York-based Pfizer said first-quarter reported net income totaled $2.35 billion, or 37 cents per share. Those earnings include accounting changes, certain items and merger-related costs.

Excluding all charges, Pfizer said first-quarter net income was $2.4 billion, or 39 cents per share, compared to $1.93 billion, or 30 cents per share, last year, matching Wall Street expectations.

Pfizer said higher-than-expected marketing and research costs would bring down second-quarter earnings growth into the single digits, but it reaffirmed its forecast for full-year 2002 earnings of between $1.56 per share to $1.60 per share, or growth in a range of 19% to 22%. Earnings should grow 15% in 2003 and 2004, Pfizer added.

Analysts were looking for Pfizer to bring home 20% earnings growth in the second quarter, or 36 cents per share, according to consensus estimates polled by Thomson Financial/First Call. Pfizer is expected to earn $1.59 in 2002, compared to $1.31 last year.

Unlike rivals

Merck

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Eli Lilly

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and

Bristol-Myers Squibb

(BMY) - Get Report

, Pfizer has not yet been hit negatively by the loss of patents on top-selling drugs, allowing it to maintain strong earnings growth.

First-quarter revenue grew 11% to $8.4 billion, from $7.6 billion last year. Pfizer's drug sales in the first quarter totaled $6.8 billion, a 13% increase over the year-ago quarter.

Lipitor, the company's cholesterol fighter and top-selling drug, racked up first-quarter sales of $1.85 billion, a 26% increase from the first quarter last year.

First-quarter sales of the impotence drug Viagra rose 12% to $422 million, while sales of the anti-depressant Zoloft rose 22% to $740 million.

On the flip side, sales of Pfizer's new antipsychotic drug Geodon were lower, totaling $38 million in the fourth quarter, down 42% from the first quarter last year and flat with the fourth quarter.

Shares of Pfizer closed Monday at $39.90 per share.