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NEW YORK (AP) — Drugmaker Pfizer's third-quarter profit plunged 38 percent as higher spending and a slew of charges related to acquisitions more than offset higher sales.
The mediocre results missed Wall Street expectations, Pfizer lowered the top end of its 2016 profit forecast and it said it was scrapping development of a highly touted experimental cholesterol drug.
Following Pfizer Inc.'s Sept. 26 announcement that it won't split into two companies to accelerate growth — a move some investors and analysts had hoped would boost Pfizer's lagging shares — investors began selling shares.
In premarket trading Tuesday, shares fell $1.21, or 3.8 percent, to $30.50.
The maker of Viagra and pain treatment Lyrica posted net income of $1.32 billion, or 21 cents per share. That's down from $2.13 billion, or 34 cents per share, in 2015's third quarter.
Excluding $2.4 billion worth of charges for acquisitions and restructuring, adjusted earnings came to 61 cents per share. The average estimate of 10 analysts surveyed by Zacks Investment Research was for earnings of 62 cents per share.
Revenue, which was boosted by last year's mega-acquisition of injected drugmaker Hospira, totaled $13.05 billion, up 8 percent. Analysts were expecting $13.06 billion.
New York-based Pfizer's spending soared, partly due to acquisitions. Production costs jumped 39 percent, and spending on research and on marketing and administration both increased 9 percent
Meanwhile, Pfizer said it expects full-year earnings in the range of $2.38 to $2.43 per share, down from its prior forecast of $2.38 to $2.48. It forecast revenue of $52 billion to $53 billion, a narrower range than its prior forecast of $51 billion to $53 billion.
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