) posted fourth quarter earnings of 47 cents per share, 3 cents
above the Zacks Consensus Estimate but 4% below the year-ago
earnings. Results were hit by the loss of exclusivity of certain
products and the unfavorable impact of currency fluctuation.
Revenues, which fell 7% to $15.1 billion, were above the Zacks
Consensus Estimate of $14.3 billion.
Including one-time items, fourth quarter earnings from
continuing operations were 85 cents compared to the year-ago
earnings of 11 cents.
Full year 2012 earnings declined 4% to $2.19 per share.
Revenues fell 10% to $58.9 billion. Both earnings and revenues
exceeded the Zacks Consensus Estimate of $2.16 per share and
$58.4 billion, respectively.
The Quarter in Detail
While foreign exchange cut fourth quarter revenues by $271
million or 2%, operational factors impacted revenues negatively
by $802 million or 5%.
International revenues declined 5% to $9.3 billion, mainly due
to the unfavorable foreign exchange impact and the loss of
Lipitor exclusivity. Meanwhile, US revenues declined 9% to $5.8
billion. US revenues were hit by the loss of exclusivity of
Lipitor in Nov 2011 and Geodon in Mar 2012.
Biopharmaceutical products delivered fourth quarter revenues
of $12.9 billion, down 9%. While the Primary Care and Specialty
Care units in the Biopharmaceutical segment recorded a decline in
revenues, Emerging Markets, Oncology and Established Products
posted an increase in revenues.
The Primary Care unit recorded a 29% decline in revenues,
which came in at $3.8 billion. A change in reporting for Lipitor
and other genericized products affected Primary Care revenues by
about $1.8 billion or 33% year-over-year. Lyrica continued to
perform well with sales coming in at $1,132 million, up 13%.
Specialty Care segment sales declined 4% to $3.7 billion. The
segment was impacted by about $360 million or 9% due to the
genericization of certain products.
Meanwhile, the inclusion of Lipitor revenues contributed to
the 3% increase in Established Products revenues, which came in
at $2.4 billion.
Lipitor was hit hard by the loss of exclusivity in the US.
Despite making significant efforts to reduce the impact of
generic competition, Pfizer saw Lipitor revenues fall 93% to $61
million in the US. Generic competition increased with the entry
of additional players like
) in the market.
The fourth quarter saw revenues from Emerging Markets grow 17%
to $2.7 billion. The Animal Health segment also recorded a 6%
increase in revenues which came in at $1.2 billion.
Consumer Healthcare revenues increased 16% to $936 million
benefiting from the Ferrosan Consumer Health and Alacer Corp.
Selling, informational and administrative (SI&A) expenses
fell 10% to $4.7 billion during the quarter. R&D expenses
fell 13.7% to $2.0 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 provided its outlook for 2013. The company expects
earnings of $2.20 - $2.30 per share on total revenues of $56.2 -
$58.2 billion. Revenues will be hit by about $4 billion due to
genericization and the expiration of a few co-promotion
Pfizer expects SI&A spend of $15.6 to $16.6 billion and
R&D spend of $6.5 to $7.0 billion. Earnings and revenue
guidance was in-line with expectations given the current Zacks
Consensus Estimate of $2.29 per share and $57.6 billion,
Pfizer's fourth quarter results were well above expectations.
Meanwhile, share buybacks, cost control and contribution from new
products like Xeljanz and Eliquis should help the company achieve
its 2013 guidance.
Pfizer currently carries a Zacks Rank #3 (Hold). Large-cap
pharma stocks that currently look more attractive include
). Both are Zacks Rank #2 (Buy) stocks.
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