Pfizer has reported a slight drop in net income in its financial results for the 2009 first quarter, which ended March 29, impacted by decreased revenues from the pending Wyeth acquisition as well as strong pressure from generic competitors for Lipitor.
For first quarter, Pfizer posted a net income of $2.7 billion, a decline of 2 percent compared with $2.8 billion in the prior-year quarter. The New York City-based company said its first quarter results were unfavorably impacted by the decrease in total revenues and other income, the increase in the effective tax rate, as well as costs incurred in connection with the pending Wyeth acquisition. The factors were partially offset by savings from cost-reduction initiatives and the elimination of in-process research and development charges in 2009. The increase in the effective tax rate on reported results to 28 percent from 22 percent in the year-ago quarter was primarily due to the increased tax cost associated with certain business decisions executed to finance the pending Wyeth acquisition.
Also, the company experienced revenues of $10.9 billion in the first quarter of 2009, a decrease of 8 percent compared with the year-ago quarter. Pfizer said that the foreign exchange unfavorably impacted revenues by approximately $640 million, or 5 percent. For first quarter of 2009, U.S. revenues were $5 billion, a decrease of 10 percent compared with the year-ago quarter. International revenues were $5.9 billion, a decrease of 7 percent compared with the prior-year quarter, and reflected operational growth of 3 percent, which was more than offset by the unfavorable impact of foreign exchange of 10 percent, according to the company.
Its primary care unit, which includes Lipitor, booked revenues for the first quarter of 2009 of $5.3 billion, an 8 percent decline compared with $5.8 billion in the year-ago quarter. In addition to the unfavorable impact of foreign exchange, the company said its decline in revenues compared with the same period last year was primarily driven by continued pressure on Lipitor from generic competition and by the negative impact of the Chantix label changes, as well as by the loss of U.S. exclusivity for Zyrtec in January 2008.
"During the quarter, we continued our ongoing efforts to reshape our operating model, made substantial progress in planning for the Wyeth integration, and faced a challenging and dynamic economic and competitive environment. Yet, we remained focused on meeting our commitments-generating revenues consistent with our expectations and continuing to streamline our cost structure," stated Jeff Kindler, chairman and CEO.