Pfizer Inc. (PFE) reported third quarter net income of 51 cents per share, which beat the Zacks Consensus Estimate of 48 cents. The company’s net income was 62 cents per share in the year-ago quarter.
Revenues for the quarter decreased 3% to $11.6 billion. Revenues for the quarter were unfavorably impacted by approximately 5% due to foreign exchange, and were favorably impacted by 2% due to an adjustment in the third quarter of 2008 for product returns.
U.S. revenues, which accounted for 41% of total revenues in the quarter, came in at $4.8 billion, a decrease of 2% compared with the year-ago quarter. International revenues decreased 4% to $6.8 billion, reflecting 5% operational growth and a 9% unfavorable foreign exchange impact.
Sales of Pfizer’s mega-blockbuster anti-cholesterol medicine Lipitor fell 9% globally to $2.85 billion in the third quarter. US sales of the drug fell 12%. The product, which is facing increased competition from cheaper generic rivals, is slated to lose exclusivity in 2011.
Sales of Lyrica rose 5% in the quarter to $708 million. Sales of Chantix (varenicline), an oral nicotinic partial agonist for smoking cessation, dropped 15% during the quarter primarily because of safety concerns surrounding it. On July 1, 2009 Pfizer announced that the US Food and Drug Administration (FDA) required it to add a black-box warning to the Chantix label. This is expected to further impact sales of the drug.
With the completion of the $68 billion acquisition of Wyeth on Oct. 15, the company raised its 2009 guidance. The company expects to end 2009 with revenues in the range of $49.0 billion – $50.0 billion, compared to the previous guidance range of $45.0 billion – $46.0 billion. Pfizer expects earnings in the range of $2.00 – $2.05 per share, up from the earlier guidance of $1.90 to $2.00 per share.
By adding Wyeth’s lucrative vaccines and animal and consumer products, as well as traditional pills such as the blockbuster antidepressant Effexor, Pfizer aims to compensate for the loss in revenues that will arise with the loss of exclusivity of the $13 billion-a-year Lipitor.
Pfizer expects the combined companies to realize synergies of about $4 billion by 2012. The deal is expected to be accretive to earnings by the second full year following closing. Roughly one-half of the savings are expected to come from Selling, General & Administrative costs with the balance coming from Research & Development.
The combined entity aims to improve its bottom line by shutting offices and factories, resorting to job-cuts and undertaking other cost-cutting measures. Pfizer intends to cut approximately 15% of the combined workforce. The combined entity should employ roughly 110,000 workers once the cuts have occurred.
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