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Pfizer’s 2Q profit sinks 79 pct but tops forecasts

By WTOP Staff

LINDA A. JOHNSON
AP Business Writer

Pfizer’s second-quarter earnings plunged 79 percent from last year, when the world’s second-largest drugmaker booked a $10 billion-plus gain from a business spinoff.

The New York company said Tuesday it earned $2.91 billion, or 45 cents per share, down from $14.1 billion, or $1.98 per share, last year. Adjusted earnings totaled 58 cents per share, a penny more than analysts expected.

Revenue slipped 2 percent to $12.77 billion, $300 million above forecasts.

Among Pfizer’s top medicines, sales climbed 16 percent to $1.32 billion for pain and fibromyalgia treatment Lyrica and 14 percent to $1.1 billion for its Prevnar vaccines against pneumonia and other infections. Pfizer noted increased generic competition to multiple Pfizer drugs, plus the end of some revenue-producing partnerships, cut revenue $850 million in the quarter.

Pfizer Inc. is best known for creating medicines for the masses, including the erectile dysfunction pill Viagra, Prevnar and cholesterol fighter Lipitor, which was the world’s top-selling drug for a decade.

CEO Ian Read has been selling noncore assets and reducing costs to free up money for research on diabetes, cancer and other complex disorders needing better treatments.

Over the past three years, Pfizer divested its capsule-making and nutrition businesses. In June 2013, it spun off its remaining stake in its animal health business as a new company, Zoetis Inc., receiving an after-tax $10.6 billion gain.

Then in May, British drugmaker AstraZeneca rejected Pfizer’s $119 billion buyout proposal, which would have been the largest deal in pharmaceutical history. Besides gaining AstraZeneca’s drugs and pipeline, Pfizer wanted to move its legal headquarters to England to get a lower tax rate than it faces in the U.S., a strategy called “inversion” that is suddenly hot in corporate America.

In an interview, Read said Pfizer continues to look at deals of all sizes, with three goals: improving its portfolio of new and experimental drugs, limiting overlap in research and sales forces, and lowering its tax bill, as inversion would do.

“There is a limited number of companies” that meet all three aims, Read said.

He said the company continues to push the federal government to reform the corporate tax structure, which taxes companies at a high 35 percent, including profits made overseas and brought back to the U.S. Most other countries tax businesses only on profits made inside their borders, putting U.S.-based companies at a disadvantage, Read said.

Pfizer noted it’s awaiting U.S. approval of a meningitis B vaccine and will apply next month for approval of its highest-profile experimental drug, palbociclib for advanced breast cancer.

Erik Gordon, an analyst and professor at University of Michigan’s Ross School of Business said the 13 percent jump in research spending in the quarter “may scare investors who are wary of Pfizer’s spotty record in turning internal R&D into successful products.”

The company reaffirmed its 2014 forecast for adjusted earnings of $2.20 to $2.30 per share. Analysts expect $2.24.

In afternoon trading, Pfizer shares were down 15 cents at $29.95. ___

Business Writer Tom Murphy in Indianapolis contributed to this story.

___

Follow Linda A. Johnson at www.twitter.com/LindaJ_onPharma

Copyright 2014 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Don’t Settle for Student Loans to Pay for Online Education

By WTOP Staff
Online college programs are becoming a more popular choice for prospective students, with one study finding that more than 6 million students enrolled in at least one online course in fall 2015. The popularity of these courses can be attributed in part to their flexibility with working adults' schedules, students' ability to progress more quickly through online programs and, oftentimes, cheaper tuition. [See 10 low-cost online bachelor's programs for out-of-state students.]Online degrees can be beneficial to many college students, but some studies have shown online learners complete their programs at lower rates than students at traditional brick-and-mortar campuses. Individuals with student loans but no degree comprise two-thirds of defaulted borrowers. Though these numbers are not encouraging, just like for traditional programs, there are ways to reduce how much you'll need to borrow for an online program to ensure you won't become one of these statistics. Don't just settle on borrowing student loans to cover the whole cost of your program and living expenses. Instead, start thinking about how to cut costs and cover your balance in different ways, such as the following. -- Grants and scholarships: Even though you are taking an online course, you can still apply and receive grants and scholarships. But your first step should be to complete the Free Application for Federal Student Aid, commonly referred to as the FAFSA, which will allow you to receive a Pell Grant if your expected family contribution is low enough. The EFC criteria and award amounts are adjusted annually, but the 2017-2018 academic year awards range from $606 to $5,920, which could significantly lower the amount you borrow annually. Your next step is to apply for scholarships. You can start by checking online scholarship search engines, such as the Salt Scholarship Search, College Board's BigFuture and Peterson's. But don't forget to take advantage of local organizations and your school's financial aid office. Both may offer scholarships that you can't find with a national scholarship search. [Review these 10 sites to kick off your scholarship search.]For instance, organizations like the Elks Club, Knights of Columbus or the Rotary Club typically offer scholarships annually to local students. Just because you're going to school online doesn't mean you're ineligible. Visit your local library for scholarship listings, and ask around town. You might be surprised how many local organizations offer scholarships. While these scholarships typically aren't large, every little bit counts. Each dollar you receive in a scholarship is a dollar you don't have to borrow and pay interest on. -- Work-study: Another option for online students may be work-study awards. Not all students enrolled in online programs are eligible, but students at some schools -- including, for example, SUNY Empire State College and Liberty University -- are. Work-study awards are not given upfront like scholarships and grants. In most cases, they are an offer to earn up to the awarded amount if you secure an eligible work-study job. While there is a misconception that all work-study jobs must be on campus, students can work for off-campus, nonprofit or public employers as long as the work is in the public's interest. You may be able to work for a for-profit employer if the job is relevant to your course of study. No matter who the outside employer is, it will need to have an established agreement with your college for you to receive work-study funds. Remember, to be eligible for federal financial aid, you must be enrolled and pursuing a degree or certificate. If you're not working toward a credential, Pell Grants and work-study won't be option, but you may still be able to take advantage of private scholarships -- just be sure to read the eligibility criteria carefully. [Explore what to know about financial aid in online programs.]-- Pay as you go: One of the great benefits to enrolling online is the flexible schedule, which can allow you to complete your college coursework around your responsibilities. But prospective students often overlook using their part- or full-time job earnings as an option for paying for college. Almost 80 percent of college students in 2015 worked at least part time while attending classes, according to the National Center for Education Statistics. By budgeting and thinking strategically about your college costs, you can likely reduce your dependence on student loans by paying a portion out of pocket. Many -- but not all -- online programs are less expensive than traditional programs and often have shorter payment periods. Six, eight or 10 weeks are common course durations. Because of the frequency of payments in an online setting, you may be well-placed to pay as you go and possibly avoid borrowing altogether. Attending college online and avoiding student loans may be challenging, but if you are willing to put in the effort, you can limit the amount you need to borrow. More from U.S. News Q&A: Understanding Student Loan Discharge Eligibility Student Loan Refinancing Isn't Right for All Borrowers
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