Pfizer beats 3Q net forecasts on lower charges, higher sales
By LINDA A. JOHNSON
Oct. 31, 2017
Pfizer doubled its third-quarter profit, thanks to slightly higher sales, lower one-time charges and reduced spending on production and administration. The drug giant edged past Wall Street's profit expectations and improved its 2017 financial forecast.
The maker of Viagra and pain treatment Lyrica on Tuesday said it will decide next year whether to sell or spin off its consumer health business, which sells products including Chapstick, Centrum vitamins and Advil pain reliever. Some analysts have been expecting Pfizer to make an acquisition, its primary growth strategy, but earlier this month, Pfizer said it's considering whether to keep or divest the business.
The New York company has been down this road before. In 2006, it sold a stable of popular consumer products — including Listerine, Nicorette, Visine, Sudafed and Neosporin —to rival Johnson & Johnson for $16.6 billion. Many analysts called that move a mistake. Just three years later, Pfizer ended up back in the consumer business with Advil, Anacin, Preparation H and other well-known brands when it bought rival drugmaker Wyeth for $68 billion.
In the latest period, Pfizer Inc. reported third-quarter profit of $2.84 billion, or 47 cents per share, up from $1.36 billion, or 22 cents per share, in 2016's third quarter.
Excluding one-time items, net income came to $4.06 billion, or 67 cents per share. That was 2 cents more than analysts expected.
The drugmaker boosted revenue 1 percent to $13.17 billion, which met forecasts.
"We view these results as refreshingly boring and, given how biopharma stocks have reacted this quarter to disappointing results or product announcements, we think boring is a good thing right now," Credit Suisse analyst Vamil Divan wrote to investors.
Over the past week, drugmakers Bristol-Myers Squibb Co., Celgene Corp. and Merck & Co. have seen their stocks drop for reasons including weak third-quarter results and disappointing financial forecasts.
Meanwhile, Pfizer posted higher sales for most of its key new drugs, including cancer medicines Ibrance and Xtandi, Xeljanz for rheumatoid arthritis and Eliquis for preventing strokes and blood clots. Top seller Prevnar, a vaccine against ear, bloodstream and other pneumococcal infections acquired in the Wyeth deal, saw sales dip 1 percent to $1.52 billion, but overall the company's key segment selling newer, patent-protected medicines posted an 11 percent increase in revenue, to $8.12 billion.
Sales from Pfizer's essential health business — mostly older drugs facing generic competition — fell 12 percent to $5.05 billion. They were hurt by manufacturing problems dragging on at its Hospira unit, causing U.S. shortages of injected drugs.
Pfizer Chief Executive Ian Read told analysts on a conference call that he's encouraged the company will see a smaller hit to sales from generic competition over the next eight years, a stretch when it expects to launch a series of new medicines.
Consumer health sales rose 4 percent to $829 million. They totaled $3.41 billion in 2016.
Pfizer now expects full-year earnings in the range of $2.58 to $2.62 per share, slightly better than its August forecast for $2.54 to $2.60 per share. It expects revenue of $52.4 billion to $53.1 billion, versus $52 billion to $54 billion in its prior forecast.
Shares of Pfizer closed down 9 cents at $35.06.
Follow Linda A. Johnson at https://twitter.com/LindaJ_onPharma