Not on 42nd St.

The drugmaker says first-quarter profit fell on special charges, disappointing sales of inhaled diabetes drug Exubera and sharply lower sales of drugs facing generic competition. Net income was $3.39 billion, or 48 cents per share, compared with $4.11 billion, or 56 cents, a year ago.

Moreover, 2007 earnings will be below Wall Street expectations due to the unexpectedly swift introduction of cheaper generic forms of Norvasc. And there are warnings that Lipitor sales cold have “modest growth to modest decline” this year because more US patients than expected are switching to cheaper generic forms of Zocor.

Excluding special items, New York-based Pfizer earned 68 cents per share. Analysts on average expected 57 cents per share, according to Reuters Estimates. Revenue rose 6 percent to $12.47 billion, helped by surging sales of its Lyrica drug for neuropathic pain.

This year, sales should be flat, but earnings are forecast to grow between 6 percent to 9 percent thanks partly to massive cost-cutting, including an ongoing reorganization that involves eliminating 10,000 jobs by next year.

From analyst notes:
Barbara Ryan of Deutsche Bank: “Recent actions to significantly reduce corporate overhead, and increase long-term earnings per share are clearly a positive, but need to be followed by strategic initiatives, namely acquisitions, which could lead to longer-term visibility, and enchance the multiple.”

Dave Risinger of Merrill Lynch: There is “another pipeline launch delayed. Pfizer does no expect to launch fesoterodine (urinary incontennce) in the US until early 2009…Still plans to do DTC advertising for Exubera starting in mid-summer, which we believe will backfire. We think that since the medical community appears to have limited interest in Exubera, a DTC push could face serious headwind.”

Further reading…
Reuters.
Pfizer statement.
[tags]Pfizer[/tags]