Pfizer plans transformation following strong third quarter

By Lisa Kerner

Charlotte, N.C., Oct. 19 - Pfizer Inc. said its third quarter was strong, with results in line with expectations.

Highlights from the quarter include revenue up 9% at $12.28 billion from $11.26 billion for the third-quarter 2005 and adjusted diluted earnings per share of $0.54, up from $0.49, according to a company news release.

Near-term challenges Pfizer faces include the loss of exclusivity on several major products, strong competition from generics and pricing. As a result, the company plans to implement a new company-wide cost-reduction initiative in 2007 designed to lower Pfizer's cost base in 2007 and 2008.

Following what the New York-based pharmaceutical company calls "exhaustive" business development efforts, Pfizer expects to generate average annual growth in adjusted diluted EPS in the high single digits over 2007 to 2008.

"We expect to continue to pay a growing dividend, adding to our current record of 39 consecutive years of dividend growth. And we will purchase up to $10 billion of stock in 2007," vice chairman David L. Shedlarz said in the release.

The company's cash flow remains strong, estimated at more than $16 billion in 2006, supplemented by expected cash proceeds of about $13.5 billion from the pending divestiture of Pfizer's Consumer Healthcare business.

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