NEW YORK — Pfizer Inc. reported higher-than-expected quarterly earnings on Tuesday, thanks largely to lower spending on research and marketing, and said it may fully divest its animal health unit following an initial public offering of up to 20 percent of the business.
The largest US drugmaker in June said it planned to separate its animal health unit into a standalone company, allowing Pfizer to focus on its core pharmaceuticals business. On Tuesday, it said it plans by mid-August to ask regulators to approve an initial public offering of up to a 20 percent stake in the new animal health business, to be called Zoetis.
Pfizer's animal health unit, with $4.2 billion in revenue last year, has more than 9,000 employees and sells medicines, vaccines and other products for livestock and pets.
"If the IPO is successfully completed, which we are targeting for the first half of 2013, we will have a variety of options to achieve a full separation of Zoetis," Pfizer chief executive Ian Read said in a release, adding that he wants to maximize after-tax returns to shareholders.
Shares of Pfizer have jumped more than 23 percent in the past year, in large part because of the company's plan to divest its infant formula business and animal health units and return much of the proceeds to shareholders through share buybacks and hefty dividends.
The company in April agreed to sell its baby formula business to Nestle SA for $11.85 billion in cash, with the deal to be completed in the first half of 2013. The business was treated in the second quarter as a discontinued operation.
Pfizer earned $3.25 billion, or 43 cents per share, in the second quarter, up from $2.61 billion, or 33 cents per share, a year earlier.
Excluding special items, profit was 62 cents per share, well above analysts' average forecast of 54 cents, according to Thomson Reuters.
Global revenue fell 9 percent to $15.06 billion, hurt by generic competition against cholesterol fighter Lipitor, but topped Wall Street expectations of $14.87 billion.
Sales would have fallen only 6 percent if not for the stronger dollar, which lowers the value of sales in overseas markets. Most other big US drugmakers have been hurt by foreign exchange factors in the quarter, including Johnson & Johnson, which cut its 2012 profit view as a consequence.
But Pfizer stuck to its 2012 earnings forecast of $2.14 to $2.24 per share, excluding special items, a decline of no more than 7 percent from a year earlier despite plunging demand for Lipitor. That is largely because of huge cost cuts, especially to Pfizer's research budget.
Sales of Lipitor, which lost patent protection in November, fell 53 percent to $1.22 billion in the quarter.
Sales of nerve pain treatment Lyrica jumped 14 percent to $1.04 billion, while sales of rheumatoid arthritis drug Enbrel rose 8 percent to $988 million, helping cushion the Lipitor decline. — Reuters