Pfizer profits jump on asset sale gain

Pfizer reported Tuesday a big jump in fourth-quarter earnings as cost-cutting efforts plus a gain from an asset sale helped offset the loss of exclusivity of a blockbuster cholesterol drug. The world's biggest pharmaceutical company posted fourth-quarter net income of $6.3 billion, up from $1.4 billion in the year-earlier period. The results included a $4.8 billion gain from the sale of the Nutrition business to Nestle. However, Pfizer continued to feel the effects of the loss of exclusivity of its popular Lipitor anti-cholesterol drug. Fourth-quarter revenue fell seven percent compared with last year's level, to $15.1 billion. Dow member Pfizer shares were up 3.3 percent in morning trade Tuesday. Pfizer's adjusted net income, which excludes one-time items such as the Nestle deal, fell seven percent from the year-earlier period to $3.5 billion. That amounted to 47 cents per share. Analysts had forecast earnings of 44 per share. The pharma giant pointed to a number of promising new drugs that are at various stages of the developmental pipeline. These include the 2013 launches of Xeljanz, which treats rheumatoid arthritis, and Eliquis for the prevention of strokes. "Overall, I am pleased with our 2012 financial performance, our recent product approvals and our expense reductions," said chief financial officer Frank D'Amelio. In early 2011, Pfizer undertook a reorganization of its research activities and eliminated some activities that were seen as ancillary. The company spent less than a year earlier on promotional programs and some corporate functions. Pfizer also is studying a potential initial public offering of up to a 19.8 percent stake in its Zoetis unit, an animal health division. Company officials said they were barred from discussing the Zoetis IPO because of a "quiet" period. D'Amelio said the company was in the middle of a road show promoting the offering. Chief executive Ian Read, in a conference call with analysts, said Pfizer could evolve in a way that splits into two companies, one for high-innovation patented drugs and the other to manage the business after generics hit the market. But he said any decisions on this structure were not imminent. Read also said Pfizer would consider a "bolt-on" acquisition along the lines of its 2010 $3.6 billion purchase of King Pharmaceuticals if it would enhance shareholder value. But Read added that "right now, the priority is to evolve our internal business." Pfizer offered 2013 guidance of $56-$58.2 billion in revenue, compared with the 2012 level of $59 billion, and adjusted diluted earnings per share of $2.20-$2.30, compared with $1.94 in 2012.