Pfizer Inc. (PFE) on Tuesday posted a higher third-quarter profit despite the recession, as sharp cost cuts made up for slightly lower sales.
The maker of cholesterol fighter Lipitor, impotence treatment Viagra and smoking cessation drug Chantix slashed costs on everything from manufacturing and marketing to research and development to produce a profit of $2.88 billion. That was up 26 percent from $2.28 billion a year earlier, when the company had a huge legal charge over promotion of its painkillers.Pfizer will keep cutting costs, now that it has completed the biggest drug industry deal of the year. The $68 billion acquisition of Wyeth last Thursday cements Pfizer's position atop the industry, and the combined company is expected to eliminate nearly 20,000 jobs by the time integration is complete.
Pfizer had sales of $11.62 billion in the quarter, down 3 percent from $11.97 billion a year ago. The company said revenue was pulled down about 5 percent due to unfavorable foreign exchange rates.
Sales were down across all five of Pfizer's business divisions, with the worst decline being a 12 percent drop in the established products business, which sells prescription drugs that have lost patent protection. Sales declined between 3 percent and 5 percent in businesses selling primary care, specialty care and cancer drugs, as well as the division selling to emerging markets such as China and India.
Pfizer said that excluding one-time charges, earnings per share would have been 51 cents. Analysts were expecting earnings per share of 48 cents and revenue of $11.41 billion, both slightly lower than Pfizer's results.
With the Wyeth acquisition, Pfizer will have about $57 billion a year in revenue, with lucrative products in everything from traditional pills and animal and consumer health products to biotech drugs and vaccines. Those include Pfizer's pain treatment Celebrex and Lyrica, blood pressure treatment Norvasc and ophthalmology drug Xalatan, plus Wyeth blockbusters including antidepressant Effexor, children's pneumococcal vaccine Prevnar and Enbrel, a biotech drug for rheumatoid arthritis.
However, revenue and costs from Wyeth were not included in Tuesday's earnings report.
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