Declining research and restructuring costs helped push Pfizer Inc.’s reported profits up 25 percent in the second quarter compared with the same period last year, the company said today.
The pharmaceutical giant, which has its largest research-and-development contingent worldwide in Groton, reported revenues of $15.1 billion for the quarter, a decrease of 9 percent from same period a year ago. Lost revenues because of new generic competition for the blockbuster heart medication Lipitor accounted for most of the sales slip, including a 15 percent slide in U.S. revenues and a 5 percent loss on the international side.
Operational declines accounted for a $977 million loss in revenue compared with the year-ago quarter, while unfavorable foreign-exchange fluctuations cost the company $451 million.
But Pfizer’s reported profit of $3.25 billion in the second quarter was up from $2.61 billion a year ago. The adjusted earnings of 62 cents a share beat consensus Wall Street projections of 54 cents a share.
Pfizer’s stock was up about 2 percent to $24.19 in mid-morning trading.
Research-and-development costs were down 25 percent, while overhead costs slipped 17 percent, the company said. Pfizer has cut about 1,000 positions over the past year and a half at its Groton campus, and has put several buildings there on the market for sale or lease.
“We delivered solid results this quarter,” said Ian Read, Pfizer’s president, chairman and chief executive, in a statement released today. “I am confident that Pfizer is well-positioned for long-term success given the potential of our innovative late-stage and emerging pipeline, strong operating cash flow, streamlined organization and disciplined approach to capital allocation.”
Read pointed out that reported profits increased despite a negative impact from patent expirations that amounted to $1.8 billion, or 11 percent of overall sales, compared with the year-ago quarter. He added that revenues from emerging markets, primarily Russia and China, had risen 14 percent year-over-year.
Pfizer also announced today that it plans to spin off its animal-health business, to be called Zoetis, in an initial public offering that will allow the company to maintain up to a 20 percent ownership stake. Pfizer expected to provide more details by mid-August, when it plans to file a registration statement with the U.S. Securities and Exchange Commission, and expects the spinoff the be completed by the first half of 2013.
Pfizer also said that the sale of its baby-formula business to Nestle for $11.8 billion is on track.
The company maintained all its financial projections for the year and said it still expects to repurchase about $5 billion in common stock this year. So far, about $3 billion has been repurchased so far this year, Pfizer said.