Pfizer Inc.'s second-quarter net income jumped 25 percent as sharply lower costs for production, marketing and restructuring more than offset a plunge in revenue from cholesterol fighter Lipitor caused by generic competition.
The world's biggest drugmaker easily beat Wall Street expectations. Pfizer's stock rose 41 cents, or 1.7 percent, to $24.12 in premarket trading.
The Viagra maker, based in New York, said Tuesday that its net income was $3.25 billion, or 43 cents per share, up from $2.61 billion, or 33 cents per share, a year earlier.
Excluding one-time items, adjusted net income was $4.67 billion, or 62 cents per share. That beat Wall Street expectations for 54 cents per share.
Revenue totaled $15.06 billion, down 9 percent from $16.49 billion a year ago. It still topped expectations for $14.93 billion, according to FactSet.
The company noted that sales lost to generic competition cost it about $2 billion in the quarter.
That's mainly because Lipitor, which reigned as the world's top-selling drugs for years, got U.S. generic competition on Nov. 30. Early sales losses to two generic versions were slowed by Pfizer's ground-breaking strategy to keep patients on its brand as long as possible. That included offering prescription plans huge rebates to exclusively cover Lipitor for the first six months, and patients discount cards to get the pills for a $4 monthly copayment, which continue. But the insurer rebates stopped at the end of May when many more generic versions flooded the market and prices plunged for all the generics.
As a result, during the quarter U.S. Lipitor sales nosedived 79 percent, to $296 million from $1.4 billion in the second quarter of 2011. Total Lipitor sales were down 53 percent, to $1.22 billion.
Newer drugs, particularly pain reliever Lyrica and pneumococcal vaccine Prevnar 13, showed sizable sales jumps that helped pick up the slack.
Overall, Pfizer said U.S. revenue fell 15 percent to $5.7 billion, while international revenue declined only 5 percent, to $9.3 billion. The company noted unfavorable exchange rates cut revenue by about 3 percent.
"We delivered solid results this quarter," CEO Ian Read said in a statement. "I am confident that Pfizer is well-positioned for long-term success given the potential of our innovative late-stage and emerging pipeline, strong operating cash flow, streamlined organization and disciplined approach to capital allocation."
Pfizer maintained the 2012 profit forecast it gave in the spring, for adjusted earnings per share of $2.14 to $2.24, and for revenue of $58 billion to $60 billion.
The company said it has repurchased about $3 billion worth of its stock through July 30 and still expects to buy back a total of about $5 billion in shares this year.