One down and one to go. Pfizer will use this $ to buy back shares, lowering the float, and will use the dividends they save to call some of the bonds used to buy Wyeth.
Pfizer pps should roar with this news and when they sell the Animal health business....even more.
All in my opinion.....Blue
here is the rest of the article:
Pfizer hasn't ruled out other uses for its cash overall. Spokeswoman Joan Campion said the company expects to maintain the financial flexibility to continue dividend increases and pursue "bolt-on" business-development opportunities.
The company has increased its dividend several times since 2010, though it remains lower than before Pfizer slashed the payout by 50% in early 2009 to help fund the $68 billion purchase of Wyeth.
Meanwhile, Pfizer hopes its drug-research efforts continue to recover from the series of setbacks it had several years ago. A key upcoming event is a scheduled May 9 meeting of a Food and Drug Administration advisory committee to consider Pfizer's application to market experimental rheumatoid arthritis treatment tofacitinib.
Analysts estimate tofacitinib could eventually generate more than $1 billion in annual sales if it reaches the market. Some analysts say FDA's staff reviewers may identify certain safety concerns with the drug, but that it could still be approved because the safety profile appears to be in line with certain rheumatoid arthritis drugs now on the market.
Here is an article that just published today. Looks like they will possible use the $ for stock buyback and such:
PPS should soar....Great stable dividend too........
In my opinion....Blue
Pfizer Earnings Could Get Boost On Nutrition Unit Sale
12:37p ET April 23, 2012 (Dow Jones) Pfizer Earnings Could Get Boost On Nutrition Unit Sale
By Peter Loftus
Of DOW JONES NEWSWIRES
Pfizer Inc.'s (PFE) earnings could get a boost in coming years if the drug maker uses most of the proceeds from the sale of its nutrition business for share buybacks.
That could help the company as it navigates through the recent loss of market exclusivity for its blockbuster cholesterol-lowering drug Lipitor. It also could serve as a hedge if the company runs into trouble with its drug-research efforts.
Pfizer agreed to sell its nutrition unit to Nestle SA (NSRGY,NESN.VX) for $11.85 billion cash, the companies said Monday. Pfizer has been pursuing divestitures of certain businesses to hone its focus on its core pharmaceutical business. Pfizer hasn't announced a final plan for shedding its animal-health unit.
Pfizer's nutrition unit, which sells baby formula and other products, has been one of its fastest-growing businesses since it inherited the unit from its 2009 acquisition of Wyeth. Sales rose 15% to $2.1 billion for 2011, helped by expansion in China and the Middle East.
Thus, Pfizer will lose one source of revenue and profit growth when it closes the nutrition unit sale, which is expected in the first half of 2013. Analysts say the nutrition unit is worth about 6 cents a share of Pfizer's annual earnings, or roughly 3% of projected 2012 earnings excluding certain items.
However, from an earnings-per-share standpoint, Pfizer could more than offset the loss of the nutrition unit by allocating the sale proceeds to share repurchases, as Pfizer has signaled it will do.
Pfizer Chief Executive Ian Read said Monday that share repurchases would be the primary use of the proceeds, which analysts estimate should be about $8 billion to $10 billion after tax.
Any use of the proceeds for business development--acquisitions or license deals--would have to carry a better return than share buybacks, Read said.
J.P. Morgan analyst Chris Schott estimated that if Pfizer uses the majority of the sale proceeds for share repurchases, the resulting lower share count would boost earnings-per-share by about 12 cents to 13 cents. Netting out the lost nutrition profits, that would boost annual earnings by about 6 cents to 7 cents a share.
While good for shareholders, the plan may not do much for Pfizer's debt picture. Moody's Investors Service said Monday that the sale of the nutrition business is "credit-negative," despite the large cash influx.
Moody's said the sale of the nutrition business will result in reduced cash flow, and the majority of proceeds are likely to be used for share repurchases. However, the impact on Pfizer's credit ratios isn't enough to affect the debt rating or outlook. Moody's rates Pfizer A1 with a stable rating outlook.
Pfizer's plan to use the proceeds for share repurchases differs from what its smaller rival, Bristol-Myers Squibb Co. (BMY), did when it started shedding non-pharmaceutical assets in 2007.
Bristol used proceeds from divestitures--including baby-formula maker Mead Johnson Nutrition Co. (MJN)--to fund a series of acquisitions and license deals to bolster Bristol's drug research pipeline, rather than immediately repurchase shares. Bristol's board later authorized a $3 billion share-buyback program in 2010.
Pfizer still has a lot of debt and management has said that the company will focus on share buybqcks.
There's almost no chance that the company would buy any of the companies you mentioned.
How high profit do you think the infant formula business is compared with branded drugs? It's positively amazing that this unit can fetch five times revenues when Pfizer as a whole with its high-margin drugs goes for less than three times revenues.
Last year's infant nutritionals revenues of $2.24B only amounted to 3.3% of total company revenues and yet the unit is being peddled for 7% of the company's $170B market cap.
Simply they want the cash. Pfizer spent many years and much $ to build the Animal Health division...why would they sell this unit too...once again for the cash to pay down debt and raise the pps. All in my opinion...Blue