Thanks to gains tied to asset sales, Pfizer (PFE) revealed surging second-quarter earnings on Tuesday that topped forecasts, although the drug giant’s sales shrank more than expected.
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Shares of the largest U.S. pharmaceutical company inched higher following the earnings beat and management’s decision to reaffirm full-year guidance.
Pfizer said it earned $14.1 billion, or $1.98 a share, last quarter, compared with a profit of $3.25 billion, or 43 cents a share, a year earlier.
Excluding one-time items like the asset-sale benefits, it earned 59 cents a share, exceeding the Street’s view of 55 cents.
However, revenue dropped 7.1% to $12.97 billion, narrowly missing consensus calls from analyst for $13.01 billion. Pfizer blamed the sales slump on the loss of exclusivity of a number of drugs. Operating margins jumped to 41.3% from 29.9%.
The report comes just a day after Pfizer unveiled plans to separate its commercial operations into two units for patent-protected brands and a third for genetics.
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“This new model represents the next step in Pfizer's journey to further revitalize our innovative core, enhance the value of our consumer and off-patent established brands and maximize the use of our capital to create value for Pfizer and our patients, consumers and shareholders,” Pfizer CEO Ian Read said in a statement.
Looking ahead, Pfizer said it stands by its prior call for non-GAAP EPS of $2.10 to $2.20 in 2012 on revenue of $50.8 billion to $52.8 billion. By comparison, analysts had been calling for EPS of $2.16 on sales of $52.4 billion.
Pfizer also said its board of directors signed off on a new $10 billion share repurchase program “to be utilized over time.” The new authorization is on top of the $3.1 billion remaining under a prior buyback plan. Pfizer said it bought back $3.3 billion of common stock during the second quarter.
A number of key drugs suffered year-over-year sales declines during the second quarter, including 3% drops for both Prevnar and Enbrel outside the U.S. and Canada. Pfizer also said its Lipitor sales plunged 55% to $545 million amid the loss of exclusivity contracts.
On the other hand, Pfizer said its Lyrica sales jumped 10% to $1.13 billion, while Celebrex sales increased 8% to $715 million.
Shares of New York-based Pfizer gained 0.51% to $29.69 ahead of Tuesday’s opening bell. Pfizer has rallied almost 18% so far this year.