Pfizer disappoints as revenue tumbles 9% to $11.35bn

Pfizer has reported quarterly revenue well below Wall Street expectations on falling sales of generic medicines, underscoring its interest in pursuing a $106bn (€76bn) bid for rival AstraZeneca to promote new business growth.

Pfizer said yesterday it hoped its sweetened offer for AstraZeneca, which was made on Friday, would help the British drugmaker “engage with Pfizer and enter into discussions relating to a possible combination of the two companies.”

AstraZeneca quickly rejected the sweetened bid, saying it “substantially” undervalued the company.

Total first-quarter revenue fell 9% to $11.35bn, which was $730m below Wall Street expectations. Revenue would have fallen 6%, if not for the stronger dollar, which lowers the value of sales outside the US.

The largest US drugmaker earned $2.33bn, or 36 cents per share, in the quarter. That compared with $2.75bn, or 38 cents, in the year-earlier period, when the company reported gains from the transfer of product rights.

Excluding special items, Pfizer earned 57 cents per share. Analysts, on average, expected 55 cents, according to Reuters.

“Definitely the results on the top line came in weaker than we were anticipating,” said Morningstar analyst Damien Conover, who cited disappointing sales of generics outside the US.

Pfizer’s earnings ultimately met his expectations because the company was able to cut costs, Conover said.

Pfizer still expects 2014 adjusted earnings of $2.20 to $2.30 per share, but the forecast assumes that painkiller Celebrex will not face US generic competition this year. Sales of the drug fell 4% to $624m in the quarter, and could be jeopardised by ongoing US patent battles in the US.

“What we’re seeing is an unusually weak first quarter, but I’m not sure it will be reflective of the full year,” said Richard Purkiss, an analyst with Atlantic Equities in London who noted the company did not lower its full-year sales forecast.

Purkiss said a number Pfizer’s key medicines, including Celebrex and impotence treatment Viagra, “undershot” sales hopes in the quarter.

Global sales of cholesterol fighter Lipitor, which is now facing cheaper US generics, disappointed.