Jan. 23 (Bloomberg) -- Pfizer Inc. reported higher profit than analysts expected as the dollar's decline helped boost global revenue from Lipitor, the world's top-selling drug, and limit the damage from generic competition.

Net income dropped 70 percent to $2.88 billion, or 42 cents a share, from a year earlier when the company had a one-time gain from selling its consumer-products division to Johnson & Johnson, Pfizer said today in a statement. Profit excluding some items was 52 cents a share, exceeding estimates by 5 cents.

Revenue also beat expectations, helped by new products as well as exchange rates. Pfizer, the world's largest drugmaker, needed the boost to make up for the introduction last year of generic versions of the blood-pressure medicine Norvasc and a drug that competes with Lipitor, a cholesterol treatment. A generic of the antidepressant Zoloft was introduced in 2006.

``From a revenue perspective, this year was obviously the most challenging that they will face for a few years,'' said Barbara Ryan, an analyst in Greenwich, Connecticut, with Deutsche Bank. ``The next couple of years what we could expect would be modest revenue increases where we've seen in the last couple years modest revenue declines.''

Most of Pfizer's major patent expirations are now behind it until 2010, when generic copies of Lipitor are expected to come on the market.

Shares Rise

Pfizer rose 63 cents, or 2.8 percent, to $22.86 at 4:30 p.m. in New York Stock Exchange composite trading. The company has declined 13 percent in the past 12 months, falling behind a 6.2 percent drop in the Standard & Poor's 500 Pharmaceutical Index.

A year earlier, when the New York-based company gained from selling its consumer-products unit to J&J for $16.6 billion, Pfizer recorded net income of $9.45 billion, or $1.32 a share.

Profit excluding some costs was 52 cents a share, compared with the average estimate of 47 cents by 17 analysts surveyed by Bloomberg. Revenue rose 3.7 percent to $13.1 billion. The average forecast among 11 analysts was $12.2 billion.

Pfizer Chief Financial Officer Frank D'Amelio said profit is expected to increase next year even in an economic downturn. Consumers will probably find other expenses to cut before reducing spending on pharmaceuticals, he said in a phone interview today.

Economy-Proof

``If the economy gets more difficult, think about what are the things you will stop spending on,'' D'Amelio said. ``I can name several things before I get to prescription drugs, including entertainment, travel, restaurants. If you just step back as a consumer, there are a whole bunch of things you'd do without first before you get to drugs.''

Pfizer said net income this year will increase to $1.78 to $1.93 a share. Excluding certain one-time charges, Pfizer forecast profits of $2.35 to $2.45 a share, compared with the mean estimate of $2.35 among 26 analysts surveyed by Bloomberg. Revenue is expected be to $47 billion to $49 billion this year, the company said, compared with $48.6 billion in 2007.

Pfizer also said it will purchase an additional $5 billion in stock over an unspecified period of time after buying back $10 billion in shares last year.

``What we are trying to do is deploy capital in the most effective way,'' D'Amelio said.

Job Cuts

Chief Executive Officer Jeffrey Kindler cut 11,000 jobs last year, closed two research centers and six manufacturing plants, the company said. That may save the company as much as $2 billion this year compared with 2006.

While Lipitor's U.S. sales fell 4 percent in the quarter and 8 percent in 2007, revenue outside the U.S. increased from favorable currency exchange rates. Total sales of the drug in the fourth quarter rose to $3.4 billion. Catherine Arnold, a Credit Suisse analyst in New York, said Jan. 18 that she expected global Lipitor sales of $3.2 billion and U.S. sales of $1.7 billion.

Lipitor accounts for about 40 percent of Pfizer's profit, making it the company's most important product. Prescriptions for Lipitor declined 12 percent last year as doctors switched patients to generic copies of Merck & Co.'s Zocor, Arnold said. Zocor works similarly to Lipitor at lowering cholesterol and costs about 3 cents a pill, compared with $3 a pill for Lipitor.

``Lipitor is one-third of their revenue, and so goes Lipitor, so goes Pfizer,'' said Les Funtleyder, an analyst with Miller Tabak & Co. in New York, in an interview Jan. 18.

Lipitor Price

Pfizer has been able to prevent Lipitor revenue from declining as much as prescriptions by raising the drug's price 6.3 percent last year and encouraging patients to go on higher, more-expensive doses.

Pfizer is using sales of its newer drugs to help offset the $667 million loss in the quarter from Norvasc.

Sales of its antismoking drug Chantix rose fourfold to $280 million in the quarter and $883 million for 2007, the first full year on the market.

A warning including in Chantix's prescribing information was strengthened by the company last week when Pfizer advised doctors to watch patients for abnormal behavior after the violent death of a rock musician using the drug led to added reports of side effects. A possible link between the drug and reports of agitation, depressed mood and suicidal thoughts among some patients taking it can't be ruled out, Pfizer said.

Sales of the pain drug Lyrica increased 60 percent to $564 million in the quarter.

Pfizer said it would discontinue sales this month of the allergy medicine Zyrtec, with $1.54 billion in sales last year, when the drug loses patent protection. Johnsons & Johnson will begin selling a non-prescription version of Zyrtec.

To contact the reporter on this story: Shannon Pettypiece in New York at spettypiece@bloomberg.net

Last Updated: January 23, 2008 18:08 EST