By Peter Loftus
Pfizer Inc.’s (PFE) fourth-quarter earnings more than doubled from a year-earlier profit that was dampened by a legal settlement, while the acquisition of Wyeth helped push sales up 34%.

But while the New York-based drug giant predicted growth in sales and adjusted earnings for 2010, the earnings outlook fell short of Wall Street expectations. Pfizer also lowered the 2012 financial targets it provided last year in conjunction with the Wyeth deal, citing subsequent asset divestitures.

“We think the Street will be a bit disappointed, but we think half a quarter is not enough time to judge the success of the now-combined” companies, Miller Tabak analyst Les Funtleyder wrote in a note to clients.

In premarket trading, Pfizer shares dropped 1.7% to $18.73.

Pfizer’s $68 billion purchase of Wyeth in October was designed to address some glaring problems: recent and impending patent expirations for top-selling drugs including the blockbuster cholesterol treatment Lipitor next year, coupled with difficulties bringing enough new products to market to replace revenue lost to generic competition.

The Wyeth deal brought Pfizer top-selling and experimental drugs that should help fill the gap, a more diversified business model, and an opportunity to substantially reduce costs. On that front, Pfizer said Wednesday it had cut about 4,200 jobs since the close of the Wyeth deal, leaving it with a worldwide work force of about 116,500 as of Dec. 31.

Pfizer said fourth-quarter net income attributable to the company was $767 million, or 10 cents a share, versus $266 million, or 4 cents a share, a year earlier.

The latest quarter included charges related to restructuring and the Wyeth purchase, while the year-earlier quarter included a charge for the $2.3 billion settlement of government investigations into sales and marketing practices for Pfizer’s former pain drug Bextra and other products. Excluding items, adjusted fourth-quarter earnings were 49 cents a share, a penny short of the mean estimate of analysts surveyed by Thomson Reuters.

For full-year 2009, Pfizer reported earnings of $1.23 a share, up from $1.20 in 2008. Excluding items, 2009 earnings were $2.02 a share, which was within Pfizer’s previous forecast range but a penny short of the Thomson Reuters view.

Pfizer’s fourth-quarter revenue rose 34% to $16.5 billion, helped by the addition of the Wyeth products as well as favorable currency-exchange trends. Full-year 2009 revenue rose 4% to $50 billion, the top end of Pfizer’s forecast range and ahead of the Street view.

Total biopharmaceutical sales for the fourth quarter rose 30% to $14.6 billion for the fourth quarter. Lipitor sales inched up 1% to $3.18 billion. Lipitor, the No. 1 prescription drug in the world by sales, has seen an overall slowdown in sales growth in recent years due to the availability of cheaper generic versions of other cholesterol drugs, such as simvastatin.

Sales growth was strong for pain drug Lyrica and cancer drug Sutent. Sales declined for anti-hypertension drug Norvasc and smoking-cessation treatment Chantix.

Pfizer’s fourth-quarter sales of the newly acquired Wyeth products don’t reflect a full quarter’s worth because the deal closed Oct. 15. Top contributors from Wyeth included the Effexor antidepressant, the Enbrel arthritis treatment and the Prevnar childhood vaccine.

Animal-health sales rose 15% to $901 million. The newly acquired consumer health care products from Wyeth brought in $494 million in revenue for the quarter.

For 2010, Pfizer sees earnings of 95 cents to $1.10 a share, or $2.10 to $2.20 a share excluding certain costs. The company predicted full-year revenue of $67 billion to $69 billion. Analysts were calling for 2010 earnings of $2.27 a share on revenue of $67.5 billion, according to Thomson.

Pfizer’s new 2012 forecast calls for earnings of $2.25 to $2.35 a share excluding items, on revenue of $66 billion to $68.5 billion. The company had previously predicted 2012 earnings comparable to Pfizer’s 2008 adjusted earnings of $2.42 a share, and sales comparable to the roughly $70 billion in combined 2008 sales of Pfizer and Wyeth.

Pfizer attributed the reduced 2012 outlook to divestitures of animal-health assets and other items that reduced the revenue target by about $1.5 billion.

-By Peter Loftus, Dow Jones Newswires; 215-656-8289; peter.loftus@dowjones.com

(Nathan Becker contributed to this article.)

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