Summary
Pfizer Inc. reported its third-quarter and nine-month results for the period ending September 28, 2008. Overall revenues remained relatively stable year-over-year for the quarter, with a slight increase for the nine-month period. Significant developments include a substantial increase in income from continuing operations, driven by the absence of large charges recorded in the prior year, such as the Exubera exit costs, and favorable tax adjustments. The company also recorded a significant charge related to the settlement of product litigation for Celebrex and Bextra. Financially, Pfizer maintained a strong liquidity position with a notable increase in cash and cash equivalents, though short-term borrowings also increased. The company is actively managing its cost structure through ongoing cost-reduction initiatives, which are progressing well and expected to deliver substantial savings. Strategic acquisitions in the biopharmaceutical and animal health sectors continued, aiming to bolster the product pipeline. Investors should note the ongoing challenges from patent expirations and increasing generic competition impacting key products, offset by growth in newer products and international markets.
Financial Highlights
27 data points| Revenue | $11.97B |
| Cost of Revenue | $2.12B |
| Gross Profit | $9.85B |
| SG&A Expenses | $3.52B |
| Net Income | $2.28B |
| EPS (Basic) | $0.34 |
| EPS (Diluted) | $0.34 |
| Shares Outstanding (Basic) | 6.72B |
| Shares Outstanding (Diluted) | 6.74B |
Key Highlights
- 1Revenue for the third quarter was $11.97 billion, largely flat compared to the prior year's $11.99 billion. Nine-month revenue increased 1% to $35.95 billion from $35.55 billion.
- 2Income from continuing operations saw a substantial increase, rising to $2.25 billion in Q3 2008 ($0.33/share diluted) from $796 million ($0.12/share diluted) in Q3 2007. Year-to-date income from continuing operations was $7.80 billion ($1.16/share diluted) compared to $5.50 billion ($0.79/share diluted) in the prior year.
- 3A significant charge of $900 million (pre-tax) was recorded in Q3 2008 for settlements of product litigation related to Celebrex and Bextra.
- 4Cost of sales decreased significantly by 54% year-over-year for the quarter, and 26% year-over-year for the nine months, largely due to the absence of a $2.6 billion charge in Q3 2007 related to the exit of Exubera.
- 5Pfizer continues its cost-reduction initiatives, reporting $716 million in associated costs for Q3 2008. The company expects to achieve at least $2.0 billion in pre-tax expense reductions by the end of 2008 compared to 2006.
- 6Cash and cash equivalents decreased to $1.27 billion as of September 28, 2008, from $3.41 billion at the end of 2007, while short-term investments increased, leading to total cash and investments of $26.87 billion.
- 7Acquisitions continued, with notable additions in the biopharmaceutical sector, including Encysive Pharmaceuticals and Serenex, contributing to $567 million in acquisition-related in-process R&D charges for the nine-month period.