Pfizer earnings top estimates, reiterates forecast

Tue Jul 30, 2013 8:05am EDT
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(Reuters) - Pfizer Inc reported second-quarter earnings slightly ahead of estimates on Tuesday as the largest U.S. drugmaker lines up a business split that could lead to the spinoff of its generics division.

The company, hit by falling sales of its now off-patent cholesterol fighter Lipitor, reaffirmed its financial outlook for the year.

For the second quarter, adjusted income fell 10 percent to $4.00 billion, or 56 cents a share, from $4.45 billion, or 59 cents a share, a year earlier. Revenue dropped 7 percent to $12.97 billion.

Analysts, on average, expected second-quarter income of 55 cents a share, on revenue of $13.01 billion, according to Thomson Reuters I/B/E/S.

Atlantic Equities analyst Richard Purkiss said improved profit margins, helped by cost controls, were responsible for the slightly better-than-expected profit.

Pfizer said it planned to separate its commercial operations into two units for branded products and a third for generics. Chief Executive Ian Read has been reviewing the group's structure after divesting its nutrition and animal health businesses.

Read said Pfizer's new model would help revitalize its innovation-based core drugs business, while enhancing the value of consumer and off-patent established brands and maximizing the use of capital.

Pfizer's generics business, which represents 17 percent of total sales, has far lower profit margins than its patent-protected drugs.

Many analysts have urged Pfizer to spin off generics so it can focus on core branded pharmaceuticals, although such a move is unlikely before 2016.   Continued...

People walk past the Pfizer Inc. headquarters in New York, January 31, 2013. REUTERS/Brendan McDermid