Financial Report: Pfizer 4Q08

Pfizer 4Q08

4Q Revenues: $12.3 billion (-4%)

4Q Earnings: $266 million (-96%)

FY Revenues: $48.3 billion (flat)

FY Earnings: $8.1 billion (flat)

Comments: Generic losses continued to dent Pfizer’s sales: Zyrtec, Camptosar and Norvasc revenues dropped $515 million from 4Q07 (and $2.6 billion for FY08). U.S. drug revenues dropped 8% to $5.3 billion for the quarter. A strengthening dollar hurt international sales, which dropped 1% to $7.1 billion. New product sales dropped 4% in 4Q08, as concerns over Chantix led to a 36% drop in the anti-smoking drug’s sales. For FY08, new product sales were up 22%. Lipitor sales dropped 8% overall in 4Q08, and were down 13% in the U.S.  Earnings in the quarter were pummeled by a $2.3 billion charge to resolve an investigation into Bextra marketing practices, as well as other investigations.

Restructuring costs in 4Q08 were $1.2 billion, pre-tax; the company contends that it has reduced costs by $2.8 billion from their 2006 figures.  Pfizer spent $2.6 billion on restructuring in 2008, after spending $2.5 billion in 2007. The company has announced another cost-cutting plan that will shave $3.0 billion from operating costs by 2011, although $1.0 billion of that savings is earmarked to “investment to high-growth opportunities,” according to a comment by Pfizer chief financial officer Frank D’Amelio. The new plan will cut 10% of workforce, reduce manufacturing sites from 46 to 41, and cost approximately $6.0 billion, pre-tax, of which $1.5 billion has already been incurred. These cuts do not include “synergies” from the acquisition of Wyeth.