New York, May: US drugmaker Pfizer Inc reported quarterly results roughly in line with expectations, as falling sales of prescription drugs undermined strong demand for consumer and animal health products that some investors want the company to sell off.
Sales of Pfizer’s core business of prescription drugs fell 2% to $14.2 billion. Cholesterol fighter Lipitor, the company’s biggest product, led the downturn, as its revenue tumbled 13% to $2.39 billion due to generic competition in overseas markets.
The world’s largest drugmaker, whose shares fell 1.3% in premarket trading, said it earned $2.22 billion, or 28 cents per share, in the first quarter. That compared with $2.03 billion, or 25 cents per share, in the year-earlier period, when Pfizer took charges related to its late 2009 purchase of rival US drugmaker Wyeth.
Excluding special items, including its Capsugel business that is being sold and is now considered to be a discontinued operation, Pfizer earned 60 cents per share. Analysts on average expected 59 cents per share, according to Thomson Reuters I/B/E/S.
Global company revenue of $16.5 billion was a bit lower than the year-earlier quarter and slightly trailed Wall Street expectations of $16.63 billion.
Revenue would have fallen 2 percentage points if not for the weaker dollar, which boosts the value of overseas sales, and for new products obtained in Pfizer’s recent purchase of specialty drugmaker King Pharmaceuticals.
Many investors fear Pfizer, which has bought three of the largest US drugmakers over the past decade, will be far too big to deliver strong profit growth once Lipitor faces cheaper US generics in November, and more than a half dozen other Pfizer drugs lose US patent protection in the next few years.
Wall Street expects Pfizer’s new chief executive, Ian Read, will eventually sell off one or more of its non-pharmaceutical businesses, or perhaps even its generic drugs operation.
By divesting such products, which have far lower profit margins than branded prescriptions drugs, the hope is that newly approved medicines will have a better chance to bolster overall earnings of the smaller company.
Pfizer on Tuesday said it aims in the second half of the year to complete its ongoing assessment of what businesses it may sell.
Animal-health sales jumped 16% to $982 million in the quarter, while sales of consumer healthcare products rose 12% to $745 million. Nutritional product sales rose 3% to $470 million.