Pfizer reported higher-than-expected quarterly earnings and revenue, and the world's biggest drugmaker said its full-year profit will be at the upper end of its prior view as savings continue to pile on from its recent merger with Wyeth.

The issue with Pfizer is whether they can deliver the numbers and they're doing exactly that, said Deutsche Bank analyst Barbara Ryan. It was a strong quarter on both the top and bottom line.

Ryan said the company, whose shares rose 2.5 percent in premarket trading, exercised strong control of expenses, although foreign-exchange benefits were probably the biggest reason for the company's earnings beat.

Pfizer

, which completed its $67 billion acquisition of Wyeth in October, said on Tuesday that it had earned $2.48 billion, or 31 cents per share, in the second quarter. That compared with $2.26 billion, or 34 cents per share, a year earlier, when it had fewer outstanding shares.

Excluding special items, Pfizer earned 62 cents per share. Analysts on average expected 52 cents, according to Thomson Reuters I/B/E/S.

Global revenue rose 58 percent to $17.33 billion, well above the analysts' average forecast of $16.65 billion. Revenues would have risen only 53 percent if not for the weaker dollar, which boosts the value of sales in overseas markets.

The company said it now expected 2010 profit to be at the upper end of its previous forecast of $2.10 to $2.20 per share, excluding special items. It said its expenses this year would be at the lower end of its earlier forecast range.

Sales of cholesterol fighter Lipitor, the world's top-selling drug, increased 5 percent to $2.81 billion, nearly $200 million above the average estimate of analysts, according to Thomson Reuters.

Lipitor sales are expected to fall as much as 75 percent late next year when cheaper generics flood U.S. drugstores, a main reason Pfizer bought Wyeth and its array of medicines.

Sales of Lyrica, for neuropathic pain, rose 21 percent to $762 million, roughly $60 million above estimates.

Pfizer shares trade at a deep discount to rivals due to the failure of its laboratories to produce many big-selling products over the past decade. The stock trades at less than 7 times Pfizer's expected per-share 2011 earnings, compared with an average price-to-earnings ratio of 9.9 for rival large U.S. and European drugmakers.

They're not getting any credit for their pipeline, Ryan said. But she said many investors are sticking with the company due to its strong cash flow and hopes that its pipeline will eventually pay off.

In the meantime, Pfizer on Tuesday reaffirmed it expects earnings in 2012 to be $2.25 per share to $2.35 per share. The outlook suggests the Wyeth merger will prevent Pfizer earnings from plunging during the first full year that Lipitor faces the generic onslaught.

(Reporting by Ransdell Pierson and Lewis Krauskopf; Editing by Lisa Von Ahn, Dave Zimmerman)

Pfizer