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Mixed Earnings From Pfizer, US Steel, Others

Pfizer's second-quarter net income jumped 25 percent, while US Steel said slower global economic growth hurt demand in a number of its core markets.


by Linda A. Johnson, AP Business Writer

Pfizer Inc.'s second-quarter net income jumped 25 percent as sharply lower costs for production, marketing and restructuring more than offset a plunge in revenue from cholesterol fighter Lipitor caused by generic competition.

The world's biggest drugmaker easily beat Wall Street expectations. Pfizer's stock rose 41 cents, or 1.7 percent, to $24.12 in premarket trading.

The Viagra maker said Tuesday that net income was $3.25 billion, or 43 cents per share, up from $2.61 billion, or 33 cents per share, a year earlier.

Excluding one-time items, adjusted net income was $4.67 billion, or 62 cents per share. That beat Wall Street expectations for 54 cents per share.

Revenue totaled $15.06 billion, down 9 percent from $16.49 billion a year ago. It still topped expectations for $14.93 billion, according to FactSet.

The company noted that sales lost to generic competition cost it about $2 billion in the quarter.

That's mainly because Lipitor, which reigned as the world's top-selling drugs for years, got U.S. generic competition on Nov. 30. Early sales losses to two generic versions were slowed by Pfizer's groundbreaking strategy to keep patients on its brand as long as possible. That included offering prescription plans huge rebates to exclusively cover Lipitor for the first six months. But the insurer rebates stopped at the end of May, when many more generic versions flooded the market and prices plunged for all the generics.

As a result, during the quarter U.S. Lipitor sales fell 79 percent, to $296 million from $1.4 billion in the second quarter of 2011. Total Lipitor sales were down 53 percent, to $1.22 billion.

Newer drugs, particularly pain reliever Lyrica and pneumococcal vaccine Prevnar 13, showed sizable sales jumps that helped pick up the slack.

Overall, Pfizer said U.S. revenue fell 15 percent to $5.7 billion, while international revenue declined only 5 percent, to $9.3 billion. The company noted unfavorable exchange rates cut revenue by about 3 percent.

"We delivered solid results this quarter," CEO Ian Read said in a statement. "I am confident that Pfizer is well-positioned for long-term success given the potential of our innovative late-stage and emerging pipeline, strong operating cash flow, streamlined organization and disciplined approach to capital allocation."

Pfizer maintained the 2012 profit forecast it gave in the spring, for adjusted earnings per share of $2.14 to $2.24, and for revenue of $58 billion to $60 billion.

The company said it has repurchased about $3 billion worth of its stock through July 30 and still expects to buy back a total of about $5 billion in shares this year.

US Steel

NEW YORK (AP) β€” United States Steel Corp. said Tuesday its second-quarter net income fell by more than half as slower global economic growth hurt demand in a number of its core markets.

But the results were better than Wall Street was expecting. Shares of U.S. Steel, which had lost more than 30 percent between April and June, jumped 4 percent in premarket trading.

The Pittsburgh manufacturer earned $101 million, or 62 cents per share, compared with $222 million, or $1.33 a share, a year ago.

Revenue fell 2 percent to $5.02 billion.

Analysts predicted net income of 48 cents per share on revenue of $5 billion, according to FactSet.

U.S. Steel Corp., which makes steel for a number of end uses from cars to building construction, said higher prices and lower costs for raw materials and energy boosted results even as economic conditions remained challenging, particularly in Europe.

For the third-quarter, US Steel says results across its segments will be lower than in the second quarter but each will manage an operating profit. The second quarter is typically the strongest for steel companies.

Investors applauded the results and outlook after a slew of bad news from the steel industry. Nucor Corp., AK Steel Holding Corp. and ArcelorMittal all reported weaker earnings from April through June, blaming anemic demand.


BERLIN (AP) β€” Drug and chemical company Bayer AG says its second-quarter earnings were a third lower than last year because of one-time charges that included money set aside to deal with lawsuits linked to a contraceptive.

Revenues rose 10 percent however and the company raised its full-year outlook.

Bayer on Tuesday reported net earnings of €494 million ($606 million) for April-June β€” down 34 percent from €747 million a year earlier. Revenues climbed to €10.18 billion from €9.25 billion.

Earnings were weighed down by one-time deductions from earnings totaling €762 million. That included €496 million in money set aside for settlement costs from lawsuits over birth control pills marketed as Yasmin and YAZ. Bayer faces lawsuits in the United States from women claiming the contraceptive caused blood clots that led to serious health consequences.

Otherwise the picture was brighter. Bayer said it was raising its predictions for full-year revenue and pre-tax earnings. Pharmaceutical sales rose 4.3 percent, helped by growth in the United States and China, while Western Europe declined.

Sales boomed 17 percent in the company's farm chemical business, continuing strong sales from the first quarter. The company said business was helped by high prices for agricultural products.

The company's materials division also saw stronger sales to companies as Bayer benefited from higher prices in North America and Europe which offset declines in Asia. The division makes foam and plastic for a wide range of uses including autos, construction and sporting goods.

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