Drugmaker Pfizer Inc.'s fourth-quarter results easily beat Wall Street expectations, driving up its stock, as profit more than quadrupled, due to tighter spending and a $4.8 billion gain from selling its nutrition business.
Those boosts offset competition from generic drugs hurting sales of Lipitor and other medicines.
The world's biggest drugmaker said Tuesday that its net income was $6.32 billion, or 85 cents per share, up from $1.44 billion, or 19 cents per share, a year earlier.
Excluding the windfall from selling its nutrition business to Nestle SA for $11.5 billion on Nov. 30, and a total of $888 million for restructuring, legal and other one-time items, the Viagra maker would have had a profit of $3.51 billion, or 47 cents per share. That's 3 cents more than analysts surveyed by FactSet were expecting.
The New York-based company's shares rose 86 cents, or 3.2 percent, to close at $27.70 Tuesday.
"It was certainly a good quarter," said Edward Jones analyst Judson Clark. "They continued to execute on their short-term business model," of controlling costs while making progress on the development of new drugs.
Revenue fell 7 percent to $15.1 billion, mainly due to generic competition to cholesterol blockbuster Lipitor. Analysts expected $14.35 billion.
"Overall, a good quarter driven by the revenue beat," BernsteinResearch analyst Dr. Timothy Anderson wrote to investors, calling Pfizer's 2013 financial forecast "a bit underwhelming."
Pfizer said it expects 2013 earnings per share of $2.20 to $2.30, excluding one-time items, and revenue of $56.2 billion to $58.2 billion. Analysts are expecting $2.28 per share and revenue of $57.55 billion.
Lipitor, which had reigned as the world's top-selling drug ever for nearly a decade, got U.S. generic competition in December 2011 and now has generic rivals in many major markets. The pill had been bringing Pfizer nearly $11 billion a year before then, down from its peak of $13 billion a year.
In the fourth quarter, Lipitor sales plunged 91 percent in the U.S. and 71 percent worldwide, to $584 million. A dozen other medicines also had lower sales due to generic competition.
Altogether, generic competition reduced prescription drug revenue by more than $2.1 billion. Unfavorable currency exchange rates lopped off another 2 percent, or $271 million.
However, several key newer drugs had double-digit sales increases, including fibromyalgia and pain treatment Lyrica, at $1.13 billion, painkiller Celebrex at $750 million, and the Prevnar 13 vaccine against meningitis and other pneumococcal infections, at $993 million. Viagra was up 6 percent at $553 million.
Altogether, Pfizer's prescription drug revenue fell 9 percent in the quarter, to $12.89 billion. The division was led by sales of primary-care medicines, which totaled $3.83 billion. Still, that was down 29 percent as Lipitor's sales in the two biggest markets, the U.S. and Japan, where shifted into the established products category. That segment, which markets off-patent drugs still popular in many countries, posted a 3 percent rise in revenue, to $2.37 billion.