Stronger Dollar and Generic Competition Hurt Pfizer's Results
Global pharmaceutical giant Pfizer ( PFE) said Tuesday that its first-quarter profit fell 2% from the year-ago quarter, as the company faced more generic competition and a stronger dollar hurt its overseas results. The New York City-based company reported fiscal first-quarter net income of $2.73 billion, or 40 cents per share, compared with $2.78 billion, or 41 cents per share, in the year-ago period. Excluding special one-time items, profit was 54 cents per share, down from 61 cents. Revenue fell 8.3% from the previous year to $10.87 billion, hurt by the stronger dollar. On average, Wall Street analysts expected net income of 49 cents per share on revenue of $11.08 billion. Pharmaceutical sales fell 7% from the year-ago quarter, hurt by slowing sales of drugs Zyrtec and Camptosar, which began facing generic competition in January and February 2008, respectively. Flagship cholesterol drug Lipitor's sales fell 13%, while arthritis treatment Celebrex dropped 8%. Pfizer also lowered its 2009 full-year forecast, to $1.20 to $1.35 per share, from $1.34 to $1.49 per share. These estimates include costs related to the company's acquisition of fellow drugmaker Wyeth ( WYE). Excluding items, however, it still expects earnings of $1.85 to $1.95 a share. Pfizer shares fell 23 cents, or -1.7%, in morning trading Tuesday. We had removed the shares of PFE from our "Recommended" list on Nov. 12, when the stock was trading at $16.77. The company has a dividend yield of 4.74%, based on last night's closing stock price of $13.49. The stock has technical support in the $11 price range. If the shares can firm up, we see overhead resistance in the $15-$16 price area. We would remain on the sidelines for now.