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Profits fall but stock price rises Tuesday on sales increase
A 26 percent increase in the sales of cancer drugs worldwide boosted Pfizer Inc. revenues in the fourth quarter, sending the company's stock price upward Tuesday even as it reported falling profits.
Profits were $2.57 billion in the quarter, down from $6.32 billion in the same period a year earlier. But, excluding one-time events, Pfizer said profits would have worked out be 56 cents a share, 4 cents higher than Wall Street expected.
Profits in the final quarter of 2012 had been higher than for the same period last year because Pfizer, which has its largest worldwide research-and-development campus in Groton, still had earnings from its animal health and nutrition businesses. The nutrition unit was sold off late in 2012, while animal health was spun off last year as Zoetis.
"(The quarter) was better than expected on established product sales, disappointing for new product launches, with less aggressive R&D expense … cuts than we assumed," Seamus Fernandez, a drug-industry analyst for Leerink Swann in Boston, wrote in a note to clients.
Fernandez called Pfizer's overall performance "solid," but said the company's upside is largely dependent on the success of new products as well as cost management.
Revenue for the world's second-largest drugmaker came in at $13.56 billion, a reduction of 2 percent as Pfizer continued to battle sales losses on such major brands as the cholesterol drug Lipitor and erectile-dysfunction medication Viagra, which is now available as a generic in several countries. But sales overall beat Wall Street estimates by $200 million.
Pfizer also met or exceeded all of its financial projections for the full year of 2013. The company noted that it repurchased $16.3 billion of its shares last year and returned $23 billion in total to investors through share repurchases and dividends.
"We enter 2014 with confidence in the competitive positioning of our commercial businesses, the prospects for our recently launched products and the strength of our research pipeline," Ian Read, Pfizer's chief executive, said in a statement.
Pfizer's better-than-expected quarter came despite the negative effect of foreign exchange, which cost the company nearly $400 million, or 3 percent of overall revenues. Operational revenues saw a $64 million increase but were outweighed by the effect of a stronger dollar.
"The operational increase was primarily due to the strong growth of Lyrica, Inlyta and Xalkori globally, Enbrel outside of North America, as well as Celebrex, Eliquis and Xeljanz, primarily in the U.S.," Pfizer said in a statement.
As part of its financial disclosures, Pfizer announced profit projections that were within the range expected by Wall Street. The stock surged on the fourth-quarter results, ending the day with a gain of about 3 percent.
|PFIZER FOURTH-QUARTER FINANCIALS|
|Reported net income||$2.57B||$6.32B||-59%|
|Adjusted earnings per share||$0.56||$0.46||+22%|
|Source: Pfizer Inc.|