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Pfizer (PFE) 4Q Earnings Jump On Sale Of Nutrition Business

 January 29, 2013 07:28 AM

(By Balachander) Pfizer Inc. (NYSE: PFE) posted a jump in quarterly earnings as a hefty gain from the sale of its Nutrition business boosted results. Adjusted results also topped market expectations.

Adjusted earnings per share (EPS) declined 4 percent to 47 cents from 49 cents, versus Wall Street expectations of 44 cents.

Reported earnings were $6.32 billion, including income of discontinued operations of $4.83 billion related to the sale of the company's Nutrition business in November 2012 to Nestle. In the year-ago quarter, Pfizer earned $1.44 billion.

Revenue was $15.06 billion, down 7 percent from $16.14 billion, while analysts expected $14.37 billion. U.S. revenue fell 9 percent, while International revenue declined 5 percent due to the unfavorable impact of foreign exchange and the losses of exclusivity of cholesterol drug Lipitor in developed Europe.

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"Fourth-quarter reported earnings were favorably impacted by the gain on the sale of the Nutrition business....lower acquisition-related costs, while unfavorably impacted by higher costs associated with the potential separation of Zoetis," the company said.

The New York-based pharmaceutical giant's total Lipitor revenue tumbled 71 percent for the fourth quarter. Lipitor lost exclusivity in the U.S. in November 2011 and other markets in 2011 and 2012. This loss of exclusivity reduced branded worldwide revenues by $1.4 billion in the fourth quarter.

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Pfizer, which bought Wyeth for $68 billion in 2009, has a diverse drug portfolio including Lipitor, Novarsc, Lyrica, Prevnar, Enbrel, Celebrex. The company shells out about $8 billion a year on R&D, and is developing more than 75 compounds.

Cost of sales fell 13 percent. Selling, informational and administrative expenses and research and development expenses dropped 7 percent and 17 percent, respectively.

Looking ahead for the full year 2013, the company forecasts adjusted EPS in the range of $2.20 to $2.30 on revenue between $56.2 billion and $58.2 billion. Analysts expect EPS of $2.29 on revenue of $57.55 billion.

The stock, which has been trading in the 52-week range between $20.75 and $27.30, ended Monday's regular trading at $26.84.

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