) posted first quarter 2013 earnings of 54 cents per share, a
penny below the Zacks Consensus Estimate and 5% below the
year-ago earnings. Results were hit by the loss of exclusivity of
certain products and the unfavorable impact of currency
fluctuation (2 cents per share). Revenues, which fell 9% to $13.5
billion, missed the Zacks Consensus Estimate of $14.0
Including one-time items, first quarter earnings were 38 cents
per share compared to the year-ago earnings of 24 cents.
The Quarter in Detail
While foreign exchange cut first quarter revenues by $118
million or 1%, operational factors impacted revenues negatively
by $1.3 billion or 8%.
International revenues declined 9% to $8.1 billion. Meanwhile,
US revenues declined 10% to $5.4 billion. US revenues were hit by
the loss of exclusivity of Lipitor in Nov 2011 and Geodon in Mar
2012 as well as purchasing patterns of Prevnar/Prevenar 13.
Biopharmaceutical products delivered first quarter revenues of
$11.5 billion, down 12%. While the Primary Care, Established
Products and Specialty Care units recorded a decline in revenues,
), Oncology and Consumer Healthcare posted an increase in
The Primary Care unit recorded a 21% decline in revenues,
which came in at $3.2 billion. Lyrica continued to perform well
with sales coming in at $1.1 billion, up 12%.
Specialty Care segment sales declined 12% to $3.2 billion. The
segment was impacted by the timing of US government purchases of
Prevnar 13 and the shift in the reporting of Geodon and Revatio
revenues in the US and Xalabrands revenues in developed Europe
Established Products revenues declined 16% to $2.4 billion due
to the presence of several generic versions of Lipitor and
competitive and pricing pressure.
Lipitor was hit hard by the loss of exclusivity in the US.
Pfizer saw Lipitor revenues fall 55% to $171 million in the US.
Generic competition increased with the entry of additional
players in the market.
The first quarter saw revenues from Emerging Markets grow 5%
to $2.4 billion. Zoetis recorded a 5% increase in revenues which
came in at $1.1 billion.
Consumer Healthcare revenues increased 12% to $811 million
benefiting from the Alacer Corp. acquisition and a strong cold
and flu season in the US. Oncology sales increased 29% to $372
million with performance being driven by the launches of Inlyta
and Xalkori in several key markets.
Selling, informational and administrative (SI&A) expenses
fell 11% to $3.5 billion during the quarter. R&D expenses
fell 3% to $1.7 billion. Pfizer remains committed to its
cost-containment efforts and should realize cost savings due to
workforce reductions, actions taken with the R&D portfolio,
as well as savings from a smaller physical footprint.
Pfizer revised its outlook for 2013 to reflect the impact of
the weak Japanese yen as well as the Zoetis IPO.
Pfizer expects now expects earnings of $2.14 - $2.24 per share
on total revenues of $55.3 - $57.3 billion. This represents a cut
from the previous guidance of earnings of $2.20 - $2.30 per share
on total revenues of $56.2 - $58.2 billion.
Pfizer continues to expect SI&A spend of $15.6 to $16.6
billion and R&D spend of $6.5 to $7.0 billion.
Pfizer's first quarter 2013 results were disappointing with
the company missing on both earnings and revenues. We expect
downward revisions in estimates as the Zacks Consensus Estimate
for earnings and revenues of $2.27 per share and $57.4 billion,
respectively, are currently above Pfizer's revised guidance
range. Revenues will be hit by genericization and the expiration
of a few co-promotion agreements.
Pfizer currently carries a Zacks Rank #3 (Hold). Stocks that
look better at present include
) which carries a Zacks Rank #2 (Buy).
) also looks well-positioned with a Zacks Rank #1 (Strong
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