Pfizer's 3Q Profit More Than Doubles Compared With Year-Ago Quarter Hit by Big Charge

Pfizer Inc. said Thursday its third-quarter profit more than doubled from a year ago when results were hurt by an acquisition charge, but predicted flat revenue growth and more cost cutting in the years ahead.

The world's largest drugmaker said the challenging operating environment is pushing it to slash costs beyond the program announced last year designed to cut $4 billion in expenses by 2008. Specifics are set to be announced next year.

Analysts had been hoping Pfizer's new CEO would be more aggressive in lowering its expensive. Its shares rose 22 cents to $28.32 in morning trading on the New York Stock Exchange.

"We recognize that the world around us is changing dramatically and that we need to accelerate the scope and speed of change to transform Pfizer," said Jeffrey B. Kindler, who took over the helm from Henry McKinnell, who had drawn strong criticism for his style, rich retirement package and the company's sliding stock price.

Kindler said that as a result of the cost-cutting, Pfizer will be able to deliver high single-digit earnings per share growth in 2007 and 2008. The company had already pledged to meet such targets and on Thursday reiterated it would earn $2 a share.

The new plan means Pfizer's operating expenses next year will fall below those of 2006, according to company vice chairman David L. Shedlarz.

Pfizer said the strengthening dollar combined with pricing policies in several European countries means it now expects revenue in the next two years to be on par with those expected in 2006. Previously, Pfizer had said predicted moderate growth.

Pfizer said it earned $3.4 billion, or 46 cents a share, in the July-September period compared with $1.6 billion or 22 cents a year earlier. In the third quarter of 2005, Pfizer took a $1.4 billion acquisition charge for its purchase of Vicuron Pharmaceuticals Inc.

After tax adjustments, Pfizer earned 54 cents a share in the latest quarter, beating by 9 cents the estimate of analysts surveyed by Thomson Financial.

Revenue rose 9 percent to $12.2 billion, beating the expectation of analysts who predicted $11.4 billion.

Lipitor revenue rose 15 percent to $3.3 billion, despite moves from health plans to switch patients to a cheap generic version of Zocor, another cholesterol-lowering agent.

Meanwhile, sales of antidepressant Zoloft plunged 43 percent to $459 million as it struggled with generic competitors launched over the summer.

But revenues of Celebrex, a pain reliever that had been hard hit by safety concerns, increased 20 percent to $537 million. Erectile dysfunction drug Viagra sales jumped 10 percent to $423 million. Its sales had been weak recently because of competition and a sluggish overall market for the products.

Deutsche Bank analyst Barbara Ryan reiterated her buy rating on the stock and her $33 a share price target, noting that Pfizer can continue to maintain growth through cost cutting and using its ample cash flow to buy new companies and technologies.

"Pfizer exceeded expectations again, despite top line pressures, we expect this to continue, due largely to its superior financial flexibility and cost cutting," she wrote in a report.

For the nine months, Pfizer's net income rose 85 percent to $9.9 billion or $1.35 a share, from $5.4 billion or 72 cents a share, a year earlier. Revenue rose 3 percent to $35.8 billion.