Pfizer (PFE) posted third-quarter 2007 revenues of $12.0 billion, a 2% decline from the same period last year. The Company’s reported net income was $761 million in the third quarter of 2007, a decrease of 77% from the same period last year, primarily reflecting pre-tax charges of $2.8 billion related to the decision to exit Exubera, its inhaled insulin product to treat diabetes.
Frank D’Amelio, Chief Financial Officer, commented, “The Exubera pre-tax charges of $2.8 billion related primarily to the write-off of assets associated with this product, as well as the accrual of other exit costs. More specifically, these charges are comprised of approximately $1.1 billion of intangible assets, $661 million of inventory, $454 million of fixed assets and $584 million of other exit costs."
Pfizre raised the lower end of its 2007 guidance ranges for revenues and adjusted diluted EPS. In addition, as a result of progress in our cost-reduction initiatives, the firm now expects adjusted SI&A expenses to decrease about $100 million more than previous guidance. Pfizer has also changed guidance on adjusted cost of sales as a percent of revenues from 15.0% to 15.5%, largely due to geographic and product mix. Given the charges the company recorded related to Exubera, it decreased its guidance on reported diluted EPS
No good news here
Douglas A. McIntye