(Reuters) - Pfizer Inc’s quarterly results came in much better than expected, as sales of its medicines accelerated in emerging markets and in the nutritional products and animal health businesses it plans to divest.
The world’s largest drugmaker raised its full-year 2011 profit forecast and reaffirmed that 2012 earnings will be little changed from this year, even after it cedes sales from its $10 billion-a-year Lipitor cholesterol fighter once cheaper generics begin flooding U.S. pharmacies on November 30.
“It was a strong quarter for Pfizer, and cost management is going in the right direction as the company prepares for the (Lipitor) patent loss,” said Morningstar analyst Damien Conover.
(For a graphic on Pfizer earnings, see: link.reuters.com/meq74s )
Pfizer’s earnings and share price have been in the dumps for most of the past five years due to worry over Lipitor’s impending collapse and the company’s inability to create big-selling drugs. Its shares were up 2.2 percent at $19.68 on Tuesday morning, even as the broad S&P 500 Index was down 2.2 percent.
Under Chief Executive Ian Read, the company has slashed its research budget and plans to slim down through the sale or spinoff of its nonpharmaceuticals units. A handful of promising new drugs working their way through late-stage trials have also restored some faith in the company’s laboratories.
Data is expected in the coming week on tofacitinib, an experimental rheumatoid arthritis drug from Pfizer that Wall Street is counting on to generate annual sales of $2 billion or more. By year’s end, Pfizer and partner Bristol-Myers Squibb plan to seek U.S. approval for Eliquis, a blood clot preventer that could claim annual sales of more than $3 billion.
Pfizer said on Tuesday it earned $3.74 billion, or 48 cents per share in the third quarter, including a $1.3 billion after-tax gain on the recent sale of its Capsugel business.
That compared with a profit of $866 million, or 11 cents per share, in the year-earlier period, when the company took a big charge for asbestos litigation.
Excluding special items, Pfizer earned 62 cents per share. Analysts on average expected 56 cents per share, according to Thomson Reuters I/B/E/S.
Company revenue rose 7 percent to $17.19 billion, well above Wall Street expectations of $16.42 billion. Revenue would have risen only 1 percent if not for the weak dollar, which increases the value of sales in overseas markets.
Revenue from prescription drugs rose 6 percent to $14.75 billion, greatly helped by soaring demand in emerging markets — a phenomenon that has propped up sales of many Pfizer rivals in the past year. Pfizer sales grew 18 percent in such markets, including include China, Russia, Turkey and India.
Global Lipitor sales rose 3 percent to $2.6 billion, which Sanford Bernstein analyst Tim Anderson said was about $140 million above his forecast and may have been due in part to fewer rebates from the drugmaker.
Sales of Enbrel, a treatment for rheumatoid arthritis obtained through Pfizer’s purchase of U.S. rival Wyeth in late 2009, rose 20 percent to $957 million. Sales of Lyrica, used to treat nerve pain, jumped 27 percent to $961 million.
But the strongest sales gains came from its noncore businesses.
Sales of consumer healthcare products, including Robitussen cough medicines acquired through the Wyeth deal, rose 15 percent to $774 million in the quarter.
Animal health products sales jumped 21 percent to $1.04 billion, boosted by the company’s recent acquisition of King Pharmaceuticals and its Alpharma brands.
Sales of nutritional products, such as baby formula and maternity supplements, jumped 31 percent to $577 million on increased demand primarily in China and the Middle East.
The company said it now expects full-year 2011 profit of $2.24 to $2.29 per share, excluding special items, from its earlier view of $2.16 to $2.26 per share. The company expects earnings next year of $2.25 to $2.35 per share.
Reporting by Ransdell Pierson; Editing by Michele Gershberg, Derek Caney and Matthew Lewis