Pfizer's fourth-quarter revenue drops 3 percent; annual sales guidance misses forecasts

Pfizer reported Tuesday that fourth-quarter sales fell 3 percent year-over-year to $13.6 billion, meeting analyst estimates. The drugmaker explained that the decline in revenue was partly attributable to a fewer number of selling days versus the year-ago quarter, which depressed sales by about $750 million.

The company noted that an 8-percent decline in revenue from its essential health unit to $5.9 billion more than offset growth of 1 percent in sales from its innovative health division, which reached $7.7 billion. Net income in the three-month period was $775 million, versus a loss of $172 million in the prior-year quarter.

CEO Ian Read said "I was pleased with the company's overall performance during 2016 and believe both of our businesses executed well despite a challenging operating environment." Read added "we generated attractive operational revenue and earnings growth driven by our major products within both the innovative health and essential health businesses."

Regarding individual products, sales of the pneumococcal vaccine franchise Prevnar declined by 24 percent versus the year-ago period to $1.4 billion, missing analyst estimates of $1.7 billion, while total sales of Lyrica reached $1.2 billion, broadly in line with forecasts. In addition, revenue from the cancer therapy Ibrance more than doubled to $643 million, with sales of Lipitor up 2 percent to $464 million.

Meanwhile, revenue from Viagra slipped 17 percent year-over-year to $284 million due to continued generic competition, while sales of Xeljanz surged 61 percent to $278 million, ahead of analyst predictions of $241 million. The drugmaker additionally recorded $139 million in alliance revenue for the cancer drug Xtandi, which it obtained via its $14-billion takeover of Medivation in September 2016.

For 2016, overall sales lifted 8 percent to $52.8 billion, with revenue in the innovative health division climbing 9 percent to $29.2 billion and sales in the essential health unit up 7 percent at $23.6 billion. Meanwhile, annual net income increased 4 percent to $7.2 billion.

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Pfizer noted that for the current year, it expects sales in the range of $52 billion to $54 billion, missing analyst estimates of approximately $54.5 billion. Meanwhile, earnings per share are predicted to be between $2.50 and $2.60, versus forecasts of $2.59. Chief financial officer Frank D'Amelio explained "our 2017 financial guidance at the midpoint of our ranges implies revenues slightly above 2016 and a 6 percent increase to adjusted diluted [earnings per share] compared to 2016 results." D'Amelio added that the forecast also "anticipates share repurchases totalling $5 billion in 2017."

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