Pfizer (PFE) Gains on Sale of Nutrition Business
Shares of Pfizer Inc. (PFE: Charts, News) closed up +0.86 or +3.2 percent to $27.70 per share on Tuesday after the company released positive fourth quarter earnings. The improved earnings were in large part attributed to the company's sale of its nutrition unit to Nestle last year.
The company reported adjusted earnings per share of $0.47, versus $0.49 in the same period one year ago, a drop of -4 percent. Analysts expected earnings of $0.44 per share. Revenue was also lower, coming in at $15.1 billion, versus $16.1 billion in 2012's fourth quarter. The lower revenue reflects a drop of $802 million on operations or 5 percent. In addition, Pfizer also was negatively impacted by foreign exchange transactions, costing the company another $271 million. Nevertheless, Pfizer's fourth quarter revenue still beat the street expectation of $14.37 billion. Daily Chart
New York City based Pfizer Inc. is the largest pharmaceutical company in the world by revenues. Pfizer's biggest products include Lipitor, used for lowering cholesterol, Diflucan, an oral antifungal medication, Viagra, for erectile dysfunction and Celebrex, an anti inflammatory drug. Pfizer lost its exclusive license to sell Lipitor in most major markets last year, which was one of the principal causes for the company to experience a -28 percent drop in revenue for its Primary Care unit compared to Q4 of 2011. The impact of the loss of exclusivity of other products, such as Geodan,caused a drop of as much as $1.8 billion in revenue for the quarter, or 33 percent. Pfizer's earnings were significantly affected by the sale of the company's nutrition unit to Nestle in late November of 2012. The company's Chairman and CEO, Ian Read stated in a post earnings conference that, "We realized significant value for our shareholders through the sale of our Nutrition business to Nestl for $11.85 billion, and we're on track subject to market conditions to unlock value from our Animal Health business by completing our IPO Zoetis in the near future, and we returned nearly $15 billion to shareholders through dividends and share repurchases." During the same conference, CFO Frank D'Amelio expressed the company's guidance for 2013, "a range for revenues of $56.2 to $58.2 billion and for adjusted diluted EPS of $2.20 to $2.30." He continued, "We expect adjusted SI&A expenses to be between $15.6 billion and $16.6 billion, with the mid-point below the 2012 level. Notably, we expect SI&A expenses will include substantial expenses associated with the launches of various key medicines, including Eliquis, Xeljanz and Prevnar/Prevenar 13 for adults, but plan to essentially offset those incremental expenses through our cost-reduction initiatives. Lastly, we expect to continue to deploy significant capital to share repurchases during the year." Pfizer stock has performed impressively, rising more than seven percent YTD and almost 30 percent since January of 2012. The stock goes ex-dividend today, paying out shareholders of record as of the close of today's trading session, a dividend of $0.24 per share. Other News About PFE Pfizer Will Consider Split of Drug Units, CEO Read Says
Company considers splitting into two separate businesses. Pfizer Receives FDA Approval For The Use Of Prevnar 13
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Published on Jan 30, 2013
By Jay Hawk