Pfizer Inc. (NYSE: PFE) reported financial results for fourth-quarter and full-year 2010. Since the acquisition of Wyeth was completed on October 15, 2009, fourth-quarter and full-year 2009 results reflect the legacy Wyeth operations from the acquisition date through Pfizer's domestic and international year-ends; results for all periods in 2010 reflect the legacy Wyeth operations. Fourth-quarter 2010 revenues were $17.6 billion, an increase of 6% compared with $16.5 billion in the year-ago quarter. Revenues for fourth-quarter 2010 compared with the year-ago quarter were favorably impacted by $2.3 billion, or 14%, due to legacy Wyeth products, negatively impacted by $1.2 billion, or 7%, due to legacy Pfizer products, and negatively impacted by $70 million, or 1%, due to foreign exchange. For fourth-quarter 2010, U.S. revenues were $7.2 billion, a decrease of 3% compared with the year-ago quarter. International revenues were $10.3 billion, an increase of 13% compared with the prior-year quarter, which reflected 14% operational growth partially offset by a 1% unfavorable impact of foreign exchange. U.S. revenues represented 41% of total revenues in fourth-quarter 2010 compared with 45% in the year-ago quarter, while international revenues represented 59% of total revenues in fourth-quarter 2010 compared with 55% in the year-ago quarter.
For full-year 2010, revenues were $67.8 billion, an increase of 36% compared with $50.0 billion in full-year 2009. Revenues for full-year 2010 compared with full-year 2009 were favorably impacted by $18.1 billion, or 37%, due to legacy Wyeth products, and by $1.1 billion, or 2%, due to foreign exchange, and negatively impacted by $1.4 billion, or 3%, due to legacy Pfizer products. U.S. revenues were $29.0 billion, an increase of 34% compared with full-year 2009. International revenues were $38.8 billion, an increase of 37% compared with full-year 2009, which reflected 33% operational growth and a 4% favorable impact of foreign exchange. U.S. revenues represented 43% and international revenues represented 57% of total revenues for full-year 2010, comparable with full-year 2009.
Ian Read, President and Chief Executive Officer, stated, "I am pleased with our solid financial performance again this quarter and this year despite continued challenging market conditions. Pfizer has a strong asset base across various therapeutic areas and geographies in addition to a promising late-stage product pipeline, which I believe positions us well going forward."
"After evaluating our operating plans and capital allocation opportunities, we have adjusted our 2012 revenue target to exclude the projected contribution from future business development transactions and have reallocated funding to support an attractive, near-term opportunity to significantly increase our share repurchase activity. As announced today, the Board has authorized an additional share repurchase program for up to $5 billion, which increases our total current authorization to $9 billion. During 2011, we anticipate repurchasing approximately $5 billion of our common stock, with the remaining authorized amount available in 2012 and beyond. These repurchases are not expected to constrain our ability to continue dividend increases or to pursue bolt-on acquisitions."
"We continue to closely evaluate our global research and development function and will accelerate our current strategies to improve innovation and overall productivity. Key steps in this process include greater focus in disease areas of greatest scientific, medical and commercial opportunity, a realigned global R&D footprint to increase our presence in key biomedical innovation hubs, and an increased level of outsourcing for services that do not drive competitive advantage for Pfizer. Furthermore, we plan to enhance internal programs that are designed to strengthen pipeline delivery and differentiated innovation. As a result of these actions, we expect to reduce adjusted R&D expenses to between approximately $6.5 to $7.0 billion in 2012 compared with our previous target of $8.0 to $8.5 billion."
"We believe that the planned increase in share repurchases and the decrease in research and development spending will serve to provide a greater degree of certainty and a more clearly defined path for us to achieve our 2012 adjusted diluted EPS target of between $2.25 and $2.35."
Mr. Read concluded, "In addition, during 2011 we expect to complete our ongoing review of the composition of our business portfolio to determine the optimal mix of businesses that we can appropriately fund and manage in order to achieve consistent growth and maximum return on investment. We believe these decisions, taken together, will continue to improve our business profile and provide both near-term and longer-term financial benefit."
Frank D'Amelio, Chief Financial Officer, stated, "Our continued confidence in the business and our ability to meet our commitments and capitalize on near- to mid-term growth opportunities are clearly reflected in the achievement of our 2010 financial guidance, including our projected cost savings from the Wyeth integration, of which more than $2.0 billion was achieved in 2010, our 11% dividend increase announced in December 2010, our additional share repurchase program and recent business development transactions. Further, our 2011 financial guidance as well as our updated 2012 financial targets reflect our confidence to successfully navigate through challenging market conditions and significant events in the company, most notably the loss of exclusivity of Lipitor in many major markets later this year."