Pfizer Inc. reported disappointing first-quarter financial results this morning,
with dramatically increased profits failing to mask weaknesses in pharmaceutical
The drug giant, which has its largest worldwide research-and-development site in Groton, reported profits of $2.75 billion for the first three months of the year, a 53 percent increase from the same period last year. But the company lowered its projected earnings for 2013 as it noted a 9 percent reduction in revenues quarter over quarter, with lower sales of its cholesterol blockbuster Lipitor accounting for most of the losses.
Lipitor started facing generic competition in much of Europe last year, and in the United States in late 2011. In the last quarter alone, sales were off 86 percent in the United States and 55 percent worldwide compared with revenue generated in the first three months of last year.
The first-quarter earnings reported appeared stronger than they really were because the same period last year had been weighed down by legal expenses as well as costs associated with worldwide downsizings.
Despite the quarterly revenue dip and 6 cent reduction in projected earnings per share for the year, Pfizer Chief Executive Officer Ian Read said in a statement that the company remains in good shape.
"We are clearly seeing the benefits of the investments we've been making in our innovative core, as evidenced by recent key product launches, including (anti-clotting medicine) Eliquis, (rheumatoid arthritis pill) Xeljanz and various oncology products, as well as significant progress within our mid-to-late stage product pipeline, most notably (breast cancer drug) palbociclib," Read said.
The report noted a 3 percent reduction in quarterly R&D expenses. But adjusted earnings per share were 54 cents, down from 57 cents a year ago, and Pfizer lowered its full-year forecast to show profits of $2.14 to $2.24 a share.
"So far this year, we have returned approximately $8 billion to shareholders in dividends and share repurchases, with significant additional capital expected to be allocated to these activities for the remainder of the year," said Frank D'Amelio, Pfizer's chief financial officer, in a statement. "Our solid performance during first-quarter 2013 was negatively impacted by approximately 2 cents per share due to changes in foreign exchange rates in relation to the U.S. dollar, including the devaluation of the Venezuelan currency in February."
Pfizer's stock price fell about 3.5 percent in late-morning trading on the New York Stock Exchange. The price of $29.36 a share was more than $1 off Monday's close but is up about 30 percent over the past year.
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