Pfizer 1st-qtr income slumps 18%, hit by generic competition and acquisition costs

Global pharmaceutical leviathan Pfizer reported a sharp 18% downturn in first-quarter 2008 net income, hit by generic competition and the cost of recent acquisitions, such as CovX and Coley Pharmaceuticals (Marketletters passim). The announcement saw the firm's share price fall 3.3%, on April 17 and drag the whole US drug sector lower.

Net income for the period fell to $2.78 billion, or $0.41 reported diluted earnings per share, down 15%. This compares with a forecast of $0.66 EPS from analysts polled by Thomson Financial. Group sales were 5% lower at $11.85 billion.

Looking forward, Pfizer noted it reaffirms its full-year 2008 financial guidance, saying it expects earnings to grow as much as 11%, mainly because of a cost-cutting program, which its chief executive Jeff Kindler said is "well on our way to achieving at a $1.5billion-$2.0 billion reduction in adjusted total costs at the end of 2008."