Despite sharply lower expenses and taxes, Pfizer Inc.'s (
NYSE:PFE,
Stock Forum) first-quarter profit dropped 15 per cent, due to cheaper generic competition for multiple medicines and some promotion partnerships with other drugmakers ending.
The world's second-biggest drugmaker by sales missed Wall Street's revenue expectations by $730 million, but narrowly beat profit expectations. Its shares fell more than 2 per cent in morning trading.
The New York-based company has seen its revenue shrink as inexpensive copycat pills hurt sales of about 20 off-patent drugs that once brought in billions annually, particularly cholesterol fighter Lipitor, the top-selling drug of all time with peak revenue of nearly $13 billion.
Meanwhile, Pfizer has been trying since January to get British rival AstraZeneca Plc (
NYSE:AZN,
Stock Forum) to discuss its bid to buy the company, but AstraZeneca continues to rebuff Pfizer. On Friday, AstraZeneca rejected Pfizer's third offer, a cash-and-stock deal worth about $106 billion, saying it still undervalues the company, particularly its drugs in development.
Pfizer said Monday it still hopes AstraZeneca will discuss the deal, which would include Pfizer moving its official domicile -but not its corporate offices - to London. That move would reduce Pfizer's income tax rate. The acquisition also would enable Pfizer, which has grown rapidly as a result of three huge acquisitions since 2000, to reduce costs with yet another round of job and other cost cuts.
The maker of Viagra said net income was $2.33 billion, or 36 cents per share, for January through March, down from $2.75 billion, or 38 cents per share, a year earlier.
Excluding one-time charges, income was 57 cents per share, two cents less than analysts expected.
Revenue totalled $11.35 billion, down 9 per cent. Analysts expected $12.08 billion.
Among Pfizer's top sellers, sales rose 8 per cent to $1.15 billion for pain and fibromyalgia treatment Lyrica and 4 per cent to $914 million for immune disorder drug Enbrel. Sales of pneumonia vaccine Prevnar were flat at $927 million, while key newer medicines - rheumatoid arthritis pill Xeljanz and cancer drugs Xalkori and Inlyta - remain disappointing at less than $100 million in the quarter.
Pfizer confirmed its 2014 adjusted profit forecast for earnings per share of $2.20 to $2.30 and revenue of $49.2 billion to $52.3 billion.
For the first time, Pfizer reported separate operating results for its three business segments, to give investors more insight into performance as the company considers eventually breaking off some of its business.
All three segments reported sales at least slightly below 2013's first quarter, and income was down for both Pfizer's newer medicines and its older, mostly off-patent drugs.
The segment that includes vaccines, cancer drugs and consumer health products, though, increased income by 6 per cent, to $1.06 billion. Pfizer reported income of $1.77 billion for its newer medicines and $4.05 billion for its older “established” prescription drugs.
Its shares fell 67 cents, or 2.2 per cent, to $30.08 in morning trading.