Pfizer reported lower-than-expected quarterly earnings and revenue, and the largest U.S. drugmaker trimmed its full-year profit outlook, sending its shares down 3 percent.
The company said on Tuesday that it earned $2.75 billion, or 38 cents a share, in the first quarter. That compared with $1.79 billion, or 24 cents a share, a year earlier, when it took charges to boost productivity and address legal matters.
Excluding special items, Pfizer Inc. (PFE) earned 54 cents a share. Analysts on average expected 55 cents.
Revenue fell 9 percent to $13.5 billion, below Wall Street expectations of $13.99 billion. Demand for Pfizer's Prevnar 13 vaccine against pneumococcal bacteria fell because of wholesalers' purchasing patterns, the company said.
Pfizer said it expected full-year earnings of $2.14 to $2.24 a share, down from its previous forecast of $2.20 to $2.30. It noted that the falling Japanese yen was hurting sales in that important market.
Sales of Prevnar 13, the company's third-biggest product, fell 10 percent to $846 million. By contrast, sales of the vaccine used to prevent pneumonia and other infections had soared 19 percent in the prior quarter.
Moreover, Pfizer said sales grew only 5 percent in emerging markets due in part to reduced government purchases of Prevnar 13 and of the company's Enbrel treatment for rheumatoid arthritis and psoriasis. Emerging market sales had jumped 17 percent in the prior quarter.
Sales of generic medicines, which Pfizer calls established products and sells mainly overseas, fell 16 percent to $2.35 billion. That was also a reversal from the prior quarter, when they rose 3 percent.
Sales of cholesterol fighter Lipitor, which has been competing with cheaper generics since November, plunged 55 percent to $626 million, while sales of impotence drug Viagra fell 7 percent to $461 million.
The disappointing earnings report hit shares of Pfizer, which had risen 22 percent so far this year on high hopes for its pipeline of experimental drugs and the recent approvals of its treatments for cancer, rheumatoid arthritis and blood clots.
Pfizer has also attracted investors through its efforts to spin off nonpharmaceutical operations and return much of the proceeds to shareholders through bigger dividends and repurchases of common stock.
In November, Pfizer approved an additional $10 billion in share repurchases, after buying back almost $6 billion in stock in 2012 through an earlier $10 billion authorization.
The company in February spun off its animal health business into a new company called Zoetis. At the time, Pfizer said it would control roughly 80 percent of Zoetis, but divest its stake within 18 months and return much of the proceeds to shareholders in the form of stock repurchases.
Pfizer shares were down 3 percent at $29.52 in trading before the market opened.
(Updated at 8:32 a.m. ET)
5 Companies Set to Cash In on America's Aging
Pfizer 1Q Profit Rises, but Trims Full-Year Outlook
Medtronic is a maker of medical devices, specializing in cardiovascular products like pacemakers, valve replacements, and various items to help repair problems in the circulatory system. But Medtronic also serves a number of other areas, including ways to treat spinal problems, diabetes and chronic pain.
One downside for investors is the fact that beginning this year, Medtronic has to pay a surtax on medical-device revenue, which was imposed to help pay for the health care reform law. Even with the tax sapping its profits, though, Medtronic will benefit from the needs of more patients needing treatment for heart-related illnesses and other ailments using its devices.
This iconic drugstore chain has been around for decades, paying ever-higher dividends to shareholders. As prescription drug use grows, Walgreen stands to have more traffic in its stores, and that in turn should drive more sales of the unrelated retail goods that the company stocks on its store shelves.
In addition to benefiting from older Americans, Walgreen has made a big push recently for international growth. Aging populations in economies around the world represent a great opportunity for Walgreen to expand beyond its domestic stronghold.
MetLife is one of the biggest providers of life insurance in the country. Insurers have gone through hard times in recent years, as poor investment returns and high payouts on certain types of insurance left them reeling from the financial crisis five years ago.
But for investors, MetLife's moves have made it a stronger stock. It's decision to stop offering long-term-care insurance has been tough on older Americans seeking protection from high health care costs, but its core insurance business benefits from the longer lifespans of an aging population. With some favorable products tailored to retirees, MetLife stands to make big strides forward in the years to come.
The scope of Johnson & Johnson's business is wider than many people realize. In addition to its well-known consumer brands like Band-Aid, J&J also has sizable pharmaceutical and medical-device arms. Though many of its rivals have broken themselves up into smaller businesses to let the individual parts focus on their respective specialties, Johnson & Johnson still sees value in its conglomerate status.
Unfortunately, J&J has had problems with its hip replacement products, which led to recalls of certain devices. But the company has overcome similar short-term problems in the past. Given the size of J&J's orthopedics business, which by itself dwarfs many of the companies that specialize in orthopedic devices, Johnson & Johnson still stands to gain from rising demand once it addresses any safety concerns.
Omega Healthcare is a real estate investment trust that specializes in owning and operating health-care-related properties, with an emphasis on skilled nursing, assisted living, independent living, and rehabilitation facilities. A growing pool of retirees seeking the community environment that these facilities offer has led to higher demand in recent years, and those trends are only likely to continue as these communities benefit from the network effect of having older peers recommend them to (relatively) younger prospects.
For investors, the real estate investment trust framework ensures a steady stream of income for your portfolio. On that score, Omega's dividend yield of 6 percent stands out as particularly attractive, topping several other similar health care REITs.