Pfizer is on a diet, and it shows. The company ($PFE) pumped up 2013 earnings despite a sizable slide in sales, thanks to
layoffs and cost cuts, not to mention the successful spinoff of its animal
health business, Zoetis. And it's looking for more of the same for 2014.
Pfizer posted adjusted 2013 earnings of $2.22 per share, a 6% increase
year-over-year. On a diluted basis, EPS was $3.19, with the Zoetis spinoff
accounting for half of that. Sales-wise, the company put up $51.6 billion, down
several percentage points from 2012's $54 billion-plus.
The revenue picture is another chapter in Pfizer's patent-cliff story. As CEO
Ian Read explained in a statement, the Lipitor hangover
continued last year, with its 41% decline in sales a continued drag on the entire company's results. Amazingly, Lipitor still accounted for $2.3 billion of Pfizer's sales; still a blockbuster after more than a year of generic competition. Pfizer sales also suffered from the loss of Enbrel sales in the U.S., as the company's partnership with Amgen ($AMGN) there ended.
continued last year, with its 41% decline in sales a continued drag on the entire company's results. Amazingly, Lipitor still accounted for $2.3 billion of Pfizer's sales; still a blockbuster after more than a year of generic competition. Pfizer sales also suffered from the loss of Enbrel sales in the U.S., as the company's partnership with Amgen ($AMGN) there ended.
On the positive side, Pfizer chalked up big gains for new drugs such as Xalkori, a targeted lung cancer treatment; and Xeljanz, a recently approved anti-inflammatory drug. Xalkori sales more than
doubled, to $282 million, while Xeljanz hit $114 million for its first full
year on the market. And Lyrica, the seizure and pain drug, continues to bring home the bacon, with $4.6
billion in global sales last year, up more than 10%.
With a 2014 revenue forecast of $49.2 billion to $51.2 billion--obviously
lower, at this point, than full-year 2013 numbers--and adjusted earnings
expectations in the same neighborhood as last year's results, Pfizer appears to
be counting on more cost cuts to keep margins up. But the big story for Pfizer
in 2014 is the restructuring into three separate business units, each with its
own leadership and financials. Market watchers will keep a close eye on each
unit's numbers as the year unfolds.
Read made only a glancing reference to that three-way split in the earnings
announcement, citing the "new commercial structure" as one highlight
of 2013. Analysts will be asking for more during this morning's call with
Pfizer executives; potential buyers are already buzzing about Pfizer's new
generics-focused business. They may also want to know more about this comment
from Read: "We seek to identify additional opportunities that will
strengthen our innovative and established pharmaceutical businesses as well as
our consumer business."