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news.Pfizer has unveiled its lowered outlook for a year that looks set to provide a number of challenges. However, the company remains confident that long-term growth can be sustained through investments in innovative products and in its strong R&D pipeline.
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In a presentation to financial analysts, company leaders say they will leverage the company’s competitive advantages to meet the challenges posed by patent expirations in the 2004-2007 period and other issues in Pfizer’s operating environment.
“Pfizer has been preparing for this period for more than a decade,” said Hank McKinnell, Pfizer’s chairman and CEO. “But 2005 will be a transition year. In addition to the loss of exclusivity on several important products, we are facing a number of uncertainties. These include the outlook for our Cox-2 franchise, continued pricing pressures, and market acceptance of new products.”
Despite these challenges, McKinnell said that he expects the company’s performance to rebound quickly in 2006, and to speed up in 2007.
Vice chairman David Shedlarz told the meeting that Pfizer expects revenues in 2005 to be substantially unchanged from 2004, when the company recorded revenues of $52.5 billion. Cost of goods sold will be substantially negatively impacted by changes in geographic and product mix, loss of exclusivity of major products in the US, and lower year-over-year sales of the Cox-2 franchise.
Shedlarz told analysts that Pfizer’s financial strengths will be enhanced by the repatriation of more than $28 billion in foreign cash in 2005. This will strengthen the company’s ability to pursue strategic opportunities, while enhancing its flexibility to invest in its R&D pipeline and new product potential in the US.
The company will record a tax charge of $2.2 billion in the first-quarter in connection with the repatriation, although this charge may be reduced by approximately $850 million, pending anticipated technical corrections.
Based on these and other factors, Pfizer said it expects to achieve 2005 GAAP net income of about $8.6 billion and GAAP diluted earnings per share of about $1.16.