Pfizer profit jumps 26 percent on cost cutting

The maker of cholesterol fighter Lipitor, impotence treatment Viagra and smoking cessation drug Chantix slashed costs on everything from manufacturing and marketing to research and development to produce a profit of US$2.88 billion. That was up 26 percent from US$2.28 billion a year earlier, when the company had a US$640 million legal charge over promotion of its painkillers.

New York-based Pfizer will keep cutting costs, now that it has completed the biggest drug industry deal of the year. The US$68 billion acquisition of Wyeth last Thursday cements Pfizer's position atop the industry, and the combined company is expected to eliminate nearly 20,000 jobs by the time integration is complete.

Pfizer had sales of US$11.62 billion in the quarter, down 3 percent from US$11.97 billion a year ago.

The company said revenue was pulled down about 5 percent due to unfavorable foreign exchange rates.

“Overall, it was a decent quarter, driven by cost cutting,” analyst Dr. Timothy Anderson of Bernstein Research wrote to clients. He said that excluding the exchange rate impact, sales would have been up 2 percent over the year-ago period, “which is modest.”

Sales were down across all five of Pfizer's business divisions, with the worst decline being a 12 percent drop in the established products business, which sells prescription drugs that have lost patent protection and so are expected to see sales erode. Sales declined between 3 percent and 5 percent in businesses selling primary care, specialty care and cancer drugs, as well as the division selling to emerging markets such as China and India.

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