Pfizer 3Q profit falls on Exubera charge
The company earned $761 million, or 11 cents per share, down sharply from profit of $3.36 billion, or 46 cents per share, during the same period a year ago. Excluding one-time charges, Pfizer said it earned 58 cents per share in the latest period.
Revenue fell 2 percent to $11.99 billion from $12.28 billion a year earlier.
The results still beat consensus estimates of analysts polled by Thomson Financial, who expected profit of 52 cents per share on revenue of $11.77 billion.
Pfizer shares rose 24 cents to $24.79 in morning trading Thursday. Over the past year, the stock has ranged between $23.13 and $28.50.
Sales of diabetes drug Exubera have been disappointing for both the company and Wall Street since its launch. The company said it will return licensing rights to partner Nektar Therapeutics Inc. and transition patients to other diabetes treatments over the next three months. The news sent Nektar shares plunging $1.14, or 14 percent, to $6.94 in morning trading.
"We made an important decision regarding Exubera, a product for which we initially had high expectations," said Jeff Kindler, chairman and chief executive, in a statement. "Despite our best efforts, Exubera has failed to gain the acceptance of patients and physicians."
Pfizer said it stopped production of the drug at its western Indiana plant and placed between 650 and 750 workers on paid leave. The plant is the sole production center for Exubera.
Wall Street welcomed the announcement, citing the drug's difficulty on the market.
"Consistent with our bearish views on Exubera, we had predicted that Pfizer would give up on Exubera eventually but had not expected this to be so soon," said Morgan Stanley analyst Jami Rubin, in a note to investors.
Meanwhile, Pfizer had already expected lower sales for several drugs, due to increasing competition from generics. Sales of the antidepressant Zoloft fell 73 percent to $124 million while sales of blood pressure drug Norvasc fell 47 percent to $640 million. Sales of the cholesterol drug Lipitor, the world's best-selling drug, dipped 5 percent to $3.17 billion.
To counter the expected loss in revenue, the company has been cutting jobs and closing facilities. Earlier in the year, Pfizer said it would eliminate 10,000 jobs.
Looking ahead, Pfizer lowered its outlook for fiscal 2007 net income to account for the hefty Exubera charges, now expecting full-year earnings per share of $1.01 to $1.10 per share, down from a prior range of $1.30 to $1.41. However, Pfizer lifted the low end of its outlook for 2007 adjusted profit to a range of $2.10 and $2.15 per share from $2.08 to $2.15 as previously expected.
Revenue is now expected to range from $47.5 billion to $48 billion, up from a previous range of $47 billion to $48 billion.
Wall Street has forecast adjusted profit of $2.12 per share on revenue of $47.55 billion for the full year.
Pfizer said Lipitor sales will likely be 3 percent to 5 percent lower in 2007, compared with 2006. This decline would mark the drug's first since its launch nearly 10 years ago.
The company reaffirmed its 2008 outlook for adjusted profit per share of $2.31 to $2.45 on revenue between $46.5 billion and $48.5 billion. Wall Street has predicted earnings excluding items of $2.33 per share on revenue of $47.04 billion.
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