Friday, January 28, 2011

Pfizer Inc. (NYSE: PFE): Q4 Earnings Preview 2010

Pfizer Inc. (NYSE: PFE), the world’s largest pharmaceutical maker, is scheduled to release fourth-quarter earnings before the market open on Tuesday, February 1, 2011. Analysts, on average, expect the company to report earnings of 46 cents per share on revenue of $16.96 billion. In the year-ago period, the company reported earnings of 49 cents per share on revenue of $16.52 billion.

Pfizer Inc., a biopharmaceutical company, engages in the discovery, development, manufacture, and marketing of prescription medicines for humans and animals worldwide. Following the Wyeth acquisition, Pfizer operates through two segments: Biopharmaceutical and Diversified. 

In the preceding third quarter, the New York-based company's net income was $866 million, or 11 cents a share, compared to $2.9 billion, or 43 cents a share, in the year-earlier quarter. On an adjusted basis, the company earned 54 cents a share in the latest quarter. Revenue jumped 39% to $16.2 billion from $11.6 billion in the same quarter last year. Analysts, on average, expected the company to report earnings of 51 cents per share on revenue of $16.69 billion. 

At its last earnings call in November, the company boosted its 2010 adjusted diluted earnings guidance to a range of $2.17 to $2.22 from a range of $2.10 to $2.20. Pfizer also narrowed its 2010 revenue forecast in the range of $67 billion to $68 billion from $67 billion to $69 billion.  Analysts currently expect full-year 2010 earnings of $2.22 per share on revenues of $67.80 billion.

The pharmaceutical giant also reaffirmed all elements of its 2012 financial targets. For 2012 Pfizer is targeting reported revenues between $65.2 and $67.7 billion, reported earnings between $1.58 and $1.73 per shares and adjusted earnings between $2.25 and $2.35 per share. Pfizer also said that it remains on track to achieve its goal of realizing synergies of about $4 to $5 billion from the Wyeth acquisition by the end of 2012.

So far, Pfizer has been unable to bring in any significant blockbuster drugs to the market that can help replace lost revenue when its blockbuster cholesterol drug Lipitor, which generated $11 billion in 2009, goes off patent late next year. Instead, the company has embarked on a series of acquisitions over the past decade, by purchasing Warner-Lambert in 2000, Pharmacia in 2003 and Wyeth in 2009. Lipitor, the world’s best-selling prescription medication, is already facing cheaper generic rivals overseas, with U.S. competition expected this coming year. Despite the merger with Wyeth, Pfizer still does not have the product mix to entirely compensate for the loss of Lipitor’s patent protection.

In December, the health-care behemoth announced that its chief executive officer and chairman, Jeffrey Kindler, will immediately retire from the company due to personal reasons. The company named Ian Read as the company's new president, chief executive officer and director. 

During the quarter in review, Pfizer raised its quarterly dividend by 11.10% to 20 cents per share from 18 cents per share. The company also agreed to acquire privately held Synbiotics Corp., a developer of veterinary diagnostics products.

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