Pfizer Unveils Plan to Save $4 Billion
Posted on: Tuesday, 5 April 2005, 09:00 CDT
NEW YORK - Pfizer Inc., the world's largest drugmaker, on Tuesday forecast a 6 percent decline in earnings this year as it launches a cost-cutting plan aimed at saving $4 billion over the next four years amid struggles with patent expirations and safety concerns over its popular pain-reliever Celebrex. Its shares rose nearly 4 percent in early trading.
The company said its 2005 earnings are expected to be $2 per share, short of the average view of $2.13 per share from analysts surveyed by Thomson Financial. Accounting for one-time items, full-year income is estimated at $1.16 per share.
However, Pfizer projected earnings for the first quarter ended March 31 at 53 cents per share, topping the analyst consensus by 1 cent.
Last year, Pfizer earned 52 cents per share in the first quarter and logged a profit of $2.12 per share for 2004.
Pfizer's targeted savings amount to twice the $2 billion figure analysts were expecting. While the company is looking to trim spending by $4 billion - about 12 percent of its costs - implementing the plan will cost between $5 billion and $6 billion through 2008, Pfizer said.
The company's challenges are formidable: The company is slated to lose as much as $9 billion in revenue in the next four years when patents expire on some of its most lucrative drugs, including anti-depressant Zoloft, allergy medicine Zyrtec and blood pressure medicine Norvasc.
Pfizer is also struggling with sagging sales of its fourth biggest selling medicine, arthritis drug Celebrex, which brought it $3.3 billion in revenues last year. Like Merck & Co.'s Vioxx drug, Celebrex has been linked to an increased risk of heart attack and strokes. Analysts expect revenues in the range of $2 billion this year.
Pfizer shares rose 98 cents, or 3.8 percent, to $26.91 in morning activity on the New York Stock Exchange.
Source: Associated Press/AP Online
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