Pfizer increases 2006 earnings forecast

Following its announcement of a 20% cut in its US sales force (Marketletter December 4), pharmaceutical giant Pfizer has increased its projections for full-year 2006 earnings, said chief executive Jeffrey Kindler, speaking at the group's R&D day, where he also revealed the largest pipeline in the company's history (see page 18). The new forecast, he said, is the result of "a favorable trend in revenues and lower costs in the fourth quarter," which translates into earnings growth of at least 6.2%.

The company now forecasts adjusted diluted earnings per share of at least $2.05 compared with its previous estimate of $2.00. It continues to target average annual adjusted diluted EPS growth in high single digits over 2007 and 2008 from the higher base of $2.05 and now projects that reported diluted EPS for this year will be a minimum of $1.68. The news, on November 30, helped lift Pfizer's share price 1.6% to $27.49.

After the job cuts statement, analysts surveyed by Thomson Financial expected EPS of $2.02 and those surveyed by Reuters said $2.01. Tim Anderson of Prudential said Pfizer's forecast was "a positive surprise." Relevance of sales force cuts