Pfizer Beats Expectations, but Guidance Disappoints -- Update
February 02 2016 - 8:15AM
Dow Jones News
By Chelsey Dulaney
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, 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 $52.49 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 move Pfizer's headquarters to Ireland, where
the tax rate is lower. The deal would also create the world's
biggest drugmaker by sales. The deal is expected to close in the
second half of 2016.
The disappointing guidance comes as Pfizer reported a return to
core revenue growth for the first time since it began to lose
exclusivity for many of its drugs. Pfizer's stand-alone revenues
grew 5% in the fourth quarter and 3% for the full-year.
For the fourth quarter ended Dec. 31, new drugs such as Prevnar
pneumonia vaccines, cancer drug Ibrance and blood-thinner Eliquis
helped drive a 15% increase in innovative product sales, or a 22%
increase when backing out the impact of foreign exchange rates.
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. Pfizer, like
many of its peers, has faced a string of patent expirations over
recent years as well as growing generic competition for former
blockbusters like cholesterol fighter Lipitor and pain pill
Celebrex.
Sales slipped 2.2% in the established drug 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 Europe
markets.
In all, Pfizer reported a profit of $613 million, or 10 cents a
share, down from $1.23 billion, or 19 cents a share a year
earlier.
The quarter included several special items, including a $878
million foreign currency loss related to Venezuela and a $491
million pension settlement charge.
Excluding those and other special items, adjusted earnings were
53 cents a share. Analysts polled by Thomson Reuters had forecast
adjusted earnings of 52 cents a share.
Revenue rose 7.1% to $14.05 billion. Analysts had forecast
$13.56 billion in revenue.
Shares of Pfizer declined 0.5% premarket to $30.02.
Write to Chelsey Dulaney at Chelsey.Dulaney@wsj.com
(END) Dow Jones Newswires
February 02, 2016 08:00 ET (13:00 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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