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| Pfizer CEO Ian Read |
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.
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: "[W]e seek to identify additional opportunities that will strengthen our innovative and established pharmaceutical businesses as well as our consumer business." What sort of deals might be coming? We'll update as we hear more from Read & Co.
- see the release from Pfizer
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