Pfizer Beats Expectations, but Guidance Disappoints -- 2nd Update
February 02 2016 - 2:25PM
Dow Jones News
By Chelsey Dulaney and Jonathan D. Rockoff
Pfizer Inc. on Tuesday reported better-than-expected results for
its fourth quarter thanks to last year's acquisition of Hospira
Inc. and strong sales of new drugs, but the pharmaceutical giant
offered soft guidance for 2016.
Pfizer, which struck a $155 billion deal in November to combine
with Allergan PLC, played down concerns on Wall Street that the
Obama administration might attempt to block the transaction, which
would move Pfizer's headquarters from New York to Ireland in a bid
to lower the company's taxes. It is a type of transaction federal
officials have repeatedly criticized.
"Under the current law, I do not believe there is any reason
this deal will not close," Pfizer CEO Ian Read said during a
conference call. The deal remains on track to close during the
second half of this year, he said, speaking about how the
combination would increase sales at the company.
Mr. Read said 2015 marked the first time the company's revenues
had grown "operationally" in five years, meaning excluding the
effects of foreign exchange, after years of falling due to generic
competition for such blockbuster products as cholesterol drug
Lipitor and painkiller Celebrex.
Newly approved drugs like breast-cancer treatment Ibrance and
blood thinner Eliquis, along with the expanded use of the Prevnar
13 pneumonia vaccine in adults, helped propel performance, Mr. Read
said.
Yet he cautioned that Pfizer couldn't count on the Prevnar 13
sales bump from extra adult use this year, and predicted
operational revenues would be flat in 2016.
Pfizer said it expects to earn $2.20 to $2.30 a share this year,
excluding special items. Analysts polled by Thomson Reuters had
forecast $2.36 a share in earnings.
The company forecast $49 billion to $51 billion in revenue,
while analysts were expecting $52.5 billion in revenue. Pfizer said
it expects heightened competition from generic drugs to cut $2.3
billion from full-year revenue, while a stronger U.S. dollar is
expected to shave another $2.3 billion from the top line.
The guidance excludes any impact from its inversion deal with
Allergan, which would create the world's biggest drugmaker by
sales.
Pfizer reported a profit of $613 million for the quarter, or 10
cents a share, down from $1.23 billion, or 19 cents a share, a year
earlier.
Excluding special items, including a $491 million pension
settlement charge, adjusted earnings were 53 cents a share.
Analysts polled by Thomson Reuters had forecast adjusted earnings
of 52 cents a share.
In the fourth quarter, Pfizer's revenues were $14 billion, up 7%
due to sales from Prevnar in adults, Ibrance and Eliquis. But the
stronger dollar hurt the fourth quarter's performance by $934
million.
The weakening of Venezuela's currency accounted for the bulk of
Pfizer's foreign-exchange hit, some $878 million. Pfizer sells
relatively large sums of rheumatoid-arthritis therapy Enbrel,
Lipitor and blood-pressure remedy Norvasc in Venezuela, according
to Chief Financial Officer Frank D'Amelio.
In September, Pfizer bought Hospira Inc. in a $16 billion deal
that has made the company a leading player in the growing market
for lower-priced versions of costly biotech drugs.
Sales slipped 2.2% in Pfizer's established-drugs business, but
were up 5% excluding currency impacts, mostly due to the inclusion
of Hospira's results. That offset the impact of losing exclusivity
for Celebrex in the U.S. and Lyrica in certain developed European
markets.
Write to Chelsey Dulaney at Chelsey.Dulaney@wsj.com
(END) Dow Jones Newswires
February 02, 2016 15:10 ET (20:10 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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