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Pfizer, the maker of cholesterol drug Lipitor and anti-impotence drug Viagra, reported a loss of $3.59 billion, or 48 cents per share. A year-ago, it earned $1.96 billion, or 32 cents per share.

Excluding one-time items, the New York-based company reported a profit of 30 cents per share. Analysts, on average, had forecast earnings excluding one-time items of 29 cents per share, according to a poll by Reuters Research, a unit of Reuters Group Plc.

Shares of Pfizer fell almost 1 percent in early trade.

Second-quarter combined sales of the Pfizer and Pharmacia product lines, which included Pharmacia sales for part of the period, were $9.99 billion.

That represented a 37 percent jump compared to last year's stand-alone Pfizer, but the rise would have been much more modest if compared on a like basis.

Pfizer said its sales growth was fueled by cholesterol fighter Lipitor, the company's biggest drug, whose global sales rose 13 percent in the quarter to $2 billion.

Henry Astarjian, an investment analyst at MFM International, said he was concerned that Lipitor's sales rose only 3 percent in the United States.

"That's only half the 6 percent U.S. growth seen in the prior quarter," said Astarjian, who noted that rival members of the "statin" class of anti-cholesterol drugs are also strapped with slowing growth.

Shares of Pfizer were down 29cents at $32.26 in early trade on the New York Stock Exchange (News - Websites).

Pfizer acquired Pharmacia largely to obtain full rights to blockbuster arthritis drug Celebrex and a sister medicine called Bextra, which had been co-marketed by the two companies.

Pfizer said combined second-quarter sales of the drugs was $529 million, although their growth performance was unclear because Pharmacia sales before the merger were not included.

David Shedlarz, Pfizer's chief financial officer, said Celebrex sales growth was curtailed as wholesalers worked down $300 million in excess inventories of it and other Pharmacia drugs.

"It was most significantly felt by Celebrex," Shedlarz said, referring to the workdown of Pharmacia inventory.

The net results included after-tax charges of $5.86 billion to account for the Pharmacia acquisition, as well as other merger-related costs of $178 million.

Pfizer said it sees cost savings from the Pharmacia acquisition reaching $3 billion next year and approaching $4 billion in 2005. The company is expected to wring cost savings from the merger by cutting both research and manufacturing facilities and employees.

Analysts have expressed concern that Pfizer is unable to drive significant earnings growth without big acquisitions. Pfizer bought Warner-Lambert for $114 billion in June 2000 and had barely swallowed Warner-Lambert by the time it announced the Pharmacia deal in July of last year.

Pfizer, which also makes epilepsy drug Neurontin, affirmed its estimates for 2003 earnings excluding items of about $1.73 per share and said 2004 earnings would be about $2.13 per share.

It forecast revenue in 2004 of $54 billion, which it said represents 10 percent annual sales growth.