Drug maker Pfizer ’s fourth-quarter profit plunged 59 percent because of discontinued operations, restructuring and other charges, and generic competition continuing to bleed sales of former blockbuster medicines.
Despite those pressures and unfavorable currency exchange rates reducing revenue by 3 percent, Pfizer easily topped Wall Street’s expectations.
New York-based Pfizer’s stock rose 76 cents, or 2.6 percent, to close Tuesday at $30.42.
“Others in the peer group have been firing on all cylinders, and Pfizer has just been average,” said Judson Clark, an analyst with Edward Jones & Co., in a telephone interview. “With as well as the market’s done, it’s tough to just be average.”
The world’s second-biggest drug maker said Tuesday that net income fell to $2.57 billion, or 39 cents per share, from $6.32 billion, or 85 cents per share, a year earlier.
Excluding one-time items, Pfizer said income would have been 56 cents per share. Analysts expected 52 cents.
Net income was reduced by the animal-health business spinoff last year and the sale of Pfizer’s nutrition business in late 2012.
Revenue totaled $13.56 billion, down 2 percent. Analysts expected $13.36 billion.
Sales of primary-care drugs fell 10 percent to $3.44 billion, mainly on generic competition for Viagra in Europe and for cholesterol fighter Lipitor.
Lipitor, the world’s top selling drug until U.S. generic competition hit two years ago, now faces cheaper copycats in Europe and Australia, too. Those drugs were shifted to the established products unit, where sales edged up 2 percent to $2.42 billion.
Specialty drug sales dropped 7 percent to $3.4 billion, on generic competition overseas for two other drugs. Meanwhile, royalties from immune-disorder drug Enbrel fell as Pfizer’s co-promotion deal winds down.
The bright spot was Pfizer’s fledgling cancer-drug business, up 26 percent to $468 million.
But Pfizer’s new clot-preventing drug Eliquis, a potential blockbuster that’s lagged behind two competitors, brought in only $71 million in the quarter. Pfizer shares that with partner Bristol-Myers Squibb Co.
Pfizer forecast 2014 adjusted profit of $2.20 to $2.30 per share and revenue of about $50.2 billion, despite expecting another $3 billion in revenue losses because of generic competition.
“We start 2014 with a sound strategy and a strong business,” Chief Executive Officer Ian Read told analysts during a conference call.
He said Pfizer will report midstage test results this year for palbociclib for advanced breast cancer, plus some other drugs and vaccines. Analysts are closely watching heavily touted palbociclib, which also is being tested against melanoma, lung and other cancers.
Bernstein Research analyst Dr. Timothy Anderson called it a “decent” quarter, noting slightly higher revenue and lower taxes than expected and lower interest, legal and asset impairment charges. But Pfizer faces more patent expirations on older drugs.
For all of 2013, Pfizer posted net income of $22 billion, up 51 percent, on revenue of $51.58 billion, down 6 percent. Pfizer repurchased 1 billion, or 13 percent, of its shares last year.
Information for this article was contributed by Drew Armstrong of Bloomberg News.
Business, Pages 25 on 01/29/2014