Pfizer Reports Rock-Solid Quarter, Sees Stronger Year Ahead
Pfizer Inc. raised its earnings outlook for the year, and said it isn’t planning to pursue another tax-inversion merger due to White House opposition.
Pfizer and Ireland-based Allergan PLC last month canceled their planned $150 billion merger after the U.S. Treasury Department issued new rules designed to stymie such tax-lowering deals, known as inversions, which move the tax residences of companies to countries with lower corporate tax rates.
On Tuesday, Pfizer Chief Executive Ian Read said the company isn’t planning to seek another such deal “in the near term,” citing the Obama administration’s opposition.
Mr. Read said Pfizer remains on the lookout for other deals, but doesn’t need one if it decides to break up the company—something Pfizer has long said it is considering.
“The businesses are strong enough to be stand-alone companies without business development,” he said. Pfizer has said it would decide whether to break up into new-drug and established-product companies by the end of this year.
For the first quarter, New York-based Pfizer reported a profit of $3.02 billion, or 49 cents a share, up from $2.38 billion, or 38 cents a share, a year prior. Revenue rose 20% to $13 billion. Excluding restructuring charges and other items, adjusted earnings were 67 cents a share, up from 51 cents. Analysts polled by Thomson Reuters had forecast adjusted earnings of 55 cents a share on revenue of $12.02 billion.
Pfizer said its strong performance so far this year, an improved business outlook and more favorable foreign exchange rates led the company to boost its outlook.
The company now expects to earn between $2.38 and $2.48 a share this year, excluding special items, up 18 cents from theprevious muted guidance that was below analysts’ expectations at the time. Analysts polled by Thomson Reuters had forecast $2.30 a share in earnings.
The company forecast $51 billion to $53 billion in revenue, up $2 billion from the previous range. Analysts were expecting $51.24 billion in revenue.
Pfizer conceded that extra selling days in the quarter contributed to some of the company’s strong quarterly performance. Among the products contributing to Pfizer’s growing sales are pneumonia vaccine Prevnar, breast-cancer drug Ibrance and blood-thinner Eliquis. Mr. Read also touted the prospects of some experimental treatments for Parkinson’s disease, Clostridium difficile bacteria infections and high cholesterol.
The company’s performance is also receiving a boost from the $16 billion purchase last year of rival Hospira, a leading maker of injectable drugs. The Hospira deal also positions Pfizer to compete in the growing market for lower-priced versions of costly biotech drugs, called biosimilars.
In April, Pfizer received U.S. approval of Inflectra, a biosimilar version of Johnson & Johnson’s Remicade rheumatoid-arthritis therapy. Mr. Read said Pfizer is preparing to launch Inflectra later this year, though the timing depends on market dynamics and the patent litigation with J&J.
By JONATHAN D. ROCKOFF and AUSTEN HUFFORD
May 3, 2016Source: http://www.wsj.com/
