Pfizer third-quarter profit beats estimates; oncology drugs shine

Tue Oct 29, 2013 9:54am EDT
 
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By Ransdell Pierson

(Reuters) - Pfizer Inc reported better-than-expected third-quarter earnings on Tuesday, helped by cuts in costs and growing sales of recently approved cancer medicines.

The largest U.S. drugmaker said it earned $2.59 billion, or 39 cents per share in the quarter. That compared with $3.21 billion, or 43 cents per share, in the year-earlier period.

Excluding special charges of $572 million related to restructurings, asset writedowns and other costs, Pfizer earned 58 cents per share. Analysts, on average, expected 56 cents per share, according to Thomson Reuters I/B/E/S.

"I like the quarter; it was better than we expected, mainly from cost cutting and a lower tax rate," said Herman Saftlas, an analyst with S&P Capital Inc. The effective tax rate fell 0.4 percent to 27.6 percent in the quarter.

Saftlas raised his 12-month share-price target on Pfizer to $35, from $33, saying the company will report data in coming months from trials of a number of promising experimental drugs and from studies testing new uses of already marketed Pfizer drugs.

"My feeling is they are making traction on their pipeline and if they get some good readouts from these trials, we could see Pfizer shares go higher," Saftlas said.

The bright spot in Pfizer's earnings report was sales of its oncology drugs, which jumped 24 percent in the quarter to $407 million.

Oncology has become one of Pfizer's biggest priorities, with the recent introductions of Xalkori for lung cancer, Inlyta for kidney cancer and Bosulif for chronic myelogenous leukemia.   Continued...

 
Workers raise a U.S. flag outside the Pfizer building in New York September 4, 2013. REUTERS/Lucas Jackson