Despite Pfizer Inc.'s reported 5.5 increase in profits during the second quarter, investors focused Tuesday on declining revenues at the pharmaceutical giant and worries over future patent expirations, sending the company's stock price down 4.6 percent.

It was the worst one-day performance this year for Pfizer's stock, which finished the day at $18.14 a share, down 87 cents. The stock had been trading at more than $20 for much of the year, driven by reports that Pfizer would be selling off several of its business units, but analysts said investors decided Tuesday to focus on the company's core business, which appeared wobbly as the New York-based firm heads toward a time later this year when its key drug, cholesterol fighter Lipitor, goes generic in the United States.

While all of its pharmaceutical-related businesses were down, except for emerging markets, Pfizer's animal health division hit a milestone, with more than $1 billion in sales for the first time in a quarter. The company's nutrition and consumer products divisions also showed solid growth of 4 percent and 6 percent, respectively.

Pfizer is currently shopping around its animal health and nutrition businesses, hoping to offset the loss of revenue that will occur when Lipitor goes off patent. But Pfizer officials said any sale of its established products unit is off the table for now.

"It's critical to emerging markets. It's important in our cash flows. It's sort of entangled in many parts of our business and our plants, so you know I think we owe it to that business and our shareholders to maximize the value from that business," Pfizer Chief Executive Ian Read said in a teleconference.

Read pointed to the company's lung cancer drug crizotinib, kidney cancer treatment axitinib, stroke-prevention drug Eliquis and rheumatoid arthritis pill tofacitinib as making particular progress in the quarter and nearing the final word on regulatory approvals.

"Overall, our late-stage (drug) pipeline is as strong as it has been for several years," Read said in the teleconference.

Pfizer, which has its largest worldwide research-and-development contingent in Groton, reported profits of $2.61 billion in the quarter, or 33 cents a share. That's an increase from the $2.48 billion, or 31 cents a share, reported in the same quarter last year.

Pfizer said the profit increase came despite losing $158 million related to U.S. health care reform and the loss of patent protection for key products such as erectile-dysfunction treatment Viagra and cholesterol pill Lipitor in several markets, at a cost of $1.5 billion.

But these losses were partially offset by increased revenue of $740 million related to favorable rates on foreign money exchange and $357 million in revenue from sales related to its purchase of the King Pharmaceuticals business.

"We returned approximately $3.8 billion to our shareholders during the quarter through $1.6 billion in dividends and $2.2 billion in share repurchases, as we believe our shares continue to represent a good investment at the current valuation," said Frank D'Amelio, Pfizer's chief financial officer, in a statement. "So far in 2011, we repurchased $4.3 billion of our shares, and we continue to anticipate repurchasing a total of between $5 billion and $7 billion of our common stock this year."

D'Amelio added that executives would be approaching the Pfizer board toward the end of the year to discuss a possible dividend increase.

Excluding one-time expenses and revenue from the Monday sale of its Capsugel unit for $2.4 billion, the company would have reported profits of 60 cents a share, slightly above Wall Street's consensus expectation of 59 cents a share.

Seamus Fernandez, a stock analyst for Leerink Swann in Boston, in a note to investors said that Pfizer reported a decent, if uninspiring, quarter that featured solid sales from arthritis treatment Enbrel, pain medication Lyrica, cancer drug Sutent and even longtime best-seller Lipitor, which will be facing generic competition in the United States in November.

"Operating costs came in above our estimates," Fernandez added.

Pfizer's U.S. revenues of $6.7 billion in the quarter represented a 9 percent decline from the year-ago quarter, while international revenues increased 5 percent, to $10.3 billion, reflecting a 3 percent operational decline more than offset by an 8 percent foreign-exchange gain thank to the declining value of the dollar. International revenues now account for 61 percent of the company's total revenues, compared with 57 percent just a year ago.

An analysis by Bloomberg news service says Pfizer between 2010 and 2015 was expected to lose exclusivity on nearly 20 drugs accounting for $25.6 billion in sales, or nearly 60 percent of its reported revenue.

To cut costs, Pfizer has announced drastic cuts in its R&D work force by next year, including the layoff or reassignment of 1,100 employees in Groton and New London, bringing its local contingent to about 3,500.

The R&D reductions worldwide are expected to save the company about $2 billion in annual expenses.

l.howard@theday.com