Pfizer (PFE), seller of erectile dysfunction drug Viagra and cholesterol fighter Lipitor, today reported a 70% decline in third-quarter net income to $866 million, or 11 cents a share, on several charges related to litigation and the Wyeth acquisition, which was completed in October of last year. Adjusted earnings, however, topped analysts' estimates and the company increased 2010 guidance.
"It's been just over a year since the closing of the Wyeth acquisition," said Chairman and CEO Jeff Kindler. "I am particularly pleased with the speed of the integration, the cost synergies achieved to date, as well as our solid financial performance this quarter and year-to-date in this difficult economic environment."
Excluding charges related to the Wyeth acquisition in the amount of $1.5 billion, and litigation-related charges of $701 million, Pfizer's third-quarter adjusted income rose 26% to $4.4 billion, or 54 cents a share, from $3.5 billion, or 51 cents a share, in the year-ago quarter. Analysts estimated earnings of 51 cents.
The largest pharmaceutical company in the world's third-quarter revenues surged 39% to $16.2 billion from $11.6 billion in the year-ago quarter. Revenues fell short of analyst estimates of $16.68 billion.
Revenues were favorably impacted by $5.2 billion, or 44%, due to the addition of the Wyeth products, negatively impacted by Pfizer products, and negatively impacted by foreign exchange. Most notably, Lipitor, the best-selling drug in the world, saw sales further decline by 11% in the quarter to $2.5 billion. The cholesterol drug, which experienced recalls lately, stands to lose patent protection next year.
"Given our solid year-to-date performance and continued confidence in the business, we are once again reaffirming our 2012 financial targets, and we are narrowing the ranges for the components of our 2010 financial guidance," CEO Frank D'Amelio stated. Additionally, Pfizer says it remains on-track to achieve the cost-reduction target of approximately $4 to $5 billion by the end of 2012.
Pfizer expects revenue in 2010 in the range of $67 billion to $68 billion, lowering the top end from a previous $69 billion. EPS guidance, however, was increased to a range of $2.17 to $2.22 from $2.10 to $2.20.