Pfizer Swings to a 4Q Profit After Rough Year, Hikes 2017 View

Pfizer predicted slightly higher sales and profit this year after a difficult 2016, though reduced spending on administration, sales, marketing and lawsuits helped it swing to a fourth-quarter profit.

The biggest U.S. drugmaker still missed profit expectations, but it edged past revenue projections.

The maker of Viagra and pain treatment Lyrica on Tuesday reported net income of $775 million, or 13 cents per share, versus a loss of $172 million a year ago.

Excluding one-time items, profit was 47 cents per share, three cents below the average estimate of analysts surveyed by Zacks Investment Research.

Quarterly revenue totaled $13.63 billion, just above the $13.55 billion Wall Street had expected.

“I believe we are positioned for continued strong performance in 2017 and beyond,” given that several current medicines and others in development could be top sellers in their categories, Pfizer CEO Ian Read said in a company release.

In early trading, Pfizer shares fell 30 cents to $31.01.

Revenue edged up 1 percent in the U.S., where Pfizer makes about half its sales, but fell 7 percent elsewhere.

Pfizer’s Innovative Health segment, which sells newer, patent-protected medicines, reported worldwide fourth-quarter sales of $7.73 billion, up just 1 percent. Sales were driven by better-than-expected revenue for Viagra, Lyrica, new breast cancer drug Ibrance, rheumatoid arthritis pill Xeljanz and a couple other drugs. However, its top seller, the Prevnar 13 vaccine against pneumonia, ear and other common infections, had sales plunge 24 percent to $1.42 billion, as the number of unvaccinated Americans has dropped.

Sales fell 8 percent to $5.9 billion at Pfizer’s essential health business, which markets older, mostly off-patent drugs, mostly due to lower overseas sales.

Sales of consumer health products such as Advil pain reliever, Chapstick and Centrum vitamins increased 2 percent to $950 million.

Pfizer Inc., based in New York, said it expects 2017 earnings in the range of $2.50 to $2.60 per share, with revenue in the range of $52 billion to $54 billion. Analysts were expecting earnings of $2.59 per share and revenue of $54.5 billion.

For all of 2016, Pfizer reported net income of $7.2 billion, or $1.17 per share, on revenue of $52.8 billion.

Last year, the Obama administration blocked Pfizer’s attempt to acquire the Irish drugmaker Allergan in a maneuver to reduce Pfizer’s U.S. tax rate that would have put its headquarters, at least on paper, in Dublin.

Pfizer also scrapped development of a high-priced new cholesterol drug once viewed as a big seller, as sales expectations dropped amid increasing pressure for lower prices from insurers and prescription benefit managers. And Pfizer decided in September not to split into two companies to accelerate growth — a move some investors and analysts had hoped would boost Pfizer’s lagging stock price.

Pfizer said it expects to buy back another $5 billion of its shares in 2017.
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Elements of this story were generated by Automated Insights (https://automatedinsights.com/ap) using data from Zacks Investment Research.

(Source: Associated Press)