Pfizer Profit Falls 87% on Tax, Bextra Costs
Pfizer Inc., the world’s largest drug maker, said Tuesday that first-quarter earnings dropped 87% because of a tax charge to return overseas profit to the U.S. and costs to suspend sales of the painkiller Bextra.
Net income fell to $301 million, or 4 cents a share, from $2.33 billion, or 30 cents, a year earlier, the New York-based company said. Revenue rose 5% to $13.1 billion, beating the $12.5-billion average estimate of analysts.
Demand for Bextra and Celebrex, a similar painkiller made by Pfizer, plunged in the quarter after both were linked to heart attacks in studies. Chief Executive Hank McKinnell is relying on the Lipitor cholesterol treatment -- which had a 23% surge in sales -- and cost cutting to compensate as he braces for patent expirations within two years on drugs that generate a third of Pfizer’s $52.5 billion in annual sales.
“This shows they are finding ways to compensate for declines in [Celebrex and Bextra] sales,” said Miller Tabak & Co. health-care strategist Les Funtleyder. “It gives a little bit more credence to their ability to turn around.”
Shares of Pfizer slipped 18 cents to $27.42 on the New York Stock Exchange.
Pfizer suspended sales of Bextra, a $1.29-billion-a-year drug, on April 7 at the request of U.S. regulators because of the drug’s link to skin disorders and heart attacks.
Analysts reduced their full-year profit forecast for Pfizer to $1.97 after the Bextra recall.
First-quarter sales of Celebrex dropped 47% to $411 million, while revenue from Bextra declined 79% to $56 million. The drugs generated a combined $4.6 billion in sales last year after getting a boost when Merck & Co. withdrew the competing Vioxx painkiller in September.
In other earnings news:
* Coca-Cola Co. said surging sales in emerging markets produced the biggest revenue gain in three quarters. Sales in the first quarter climbed 3.7% to $5.27 billion, helped by the decline of the U.S. dollar and a 21% gain in China. Net income fell 11%, less than analysts’ estimates, to $1 billion, or 42 cents a share, from a year earlier.
* Kraft Foods Inc. said earnings climbed for the first time in seven quarters, helped by lower restructuring costs. The company cut its profit forecast for the year by 2 cents a share. First-quarter net income rose 27% to $713 million, or 42 cents a share, from $560 million, or 33 cents, a year earlier when costs to close factories and cut jobs subtracted 11 cents a share. Sales increased 6.4% to $8.06 billion.
* MGM Mirage Inc. said first-quarter profit rose 4.9% as more hotel rooms boosted lodging and gambling revenue. Net income rose to $111.1 million, or 75 cents a share, from $105.8 million, or 72 cents, a year earlier. Revenue rose 13% to $1.2 billion.
