Pfizer cut its 2003 earnings forecast to single-digit growth because of its plans to sharply reduce excess drugs inventory levels at Pharmacia, as it integrates the US drug group it purchased this year.
However, the group - which employs more than 1,000 people in Ireland - said the almost $58 billion (€49 billion) Pharmacia acquisition would help it boost earnings by 23 per cent in 2004, excluding one-time items, as better-than-expected cost savings kick in.
Pfizer briefed Wall Street yesterday for the first time since the April closing of the Pharmacia deal, that strongly reinforced its position as the world's largest drugmaker by sales. "Pfizer is entering a period of unparalleled opportunity. The answer lies in our scale," said Mr Hank McKinnell, chief executive.
Pfizer expects $54 billion in sales next year, up from estimates of $45 billion for this. Its shares rose about 4 per cent to $35.87 in lunchtime trading.
Pfizer found Pharmacia's drug inventories were standing at an average of 2½ months' supply. It plans to slash that by two-thirds this year to its preferred levels, but that will lower sales.
Pfizer expects the inventory reduction to reduce earnings per share, excluding items, by 7 cents, to $1.73 - up only 9 per cent from $1.59 per share last year. It previously forecast earnings at $1.80 for this year. As a result, Pfizer warned that its second-quarter earnings would fall 12 per cent to 29 cents per share, and below the 38 cents expected by Wall Street.
- (Financial Times Service)
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