* Lipitor sales drag in quarter, cancer drugs strong
* Results come day after plan for branded, generics split
July 30 (Reuters) - Pfizer Inc reportedsecond-quarter earnings slightly ahead of estimates on Tuesdayas the largest U.S. drugmaker lines up a business split thatcould lead to the spinoff of its generics division.
The company, hit by falling sales of its now off-patentcholesterol fighter Lipitor, reaffirmed its financial outlookfor the year.
For the second quarter, adjusted income fell 10 percent to$4.00 billion, or 56 cents a share, from $4.45 billion, or 59cents a share, a year earlier. Revenue dropped 7 percent to$12.97 billion.
Analysts, on average, expected second-quarter income of 55cents a share, on revenue of $13.01 billion, according toThomson Reuters I/B/E/S.
Atlantic Equities analyst Richard Purkiss said improvedprofit margins, helped by cost controls, were responsible forthe slightly better-than-expected profit.
Pfizer said it planned to separate its commercial operationsinto two units for branded products and a third for generics.Chief Executive Ian Read has been reviewing the group'sstructure after divesting its nutrition and animal healthbusinesses.
Read said Pfizer's new model would help revitalize itsinnovation-based core drugs business, while enhancing the valueof consumer and off-patent established brands and maximizing theuse of capital.
Pfizer's generics business, which represents 17 percent oftotal sales, has far lower profit margins than itspatent-protected drugs.
Many analysts have urged Pfizer to spin off generics so itcan focus on core branded pharmaceuticals, although such a moveis unlikely before 2016.
Within the core drugs division, revenues from cancermedicines increased by 28 percent in the second quarter, helpedby new products like Inlyta and Xalkori.
Read also said he expected business in emerging markets toaccelerate in the second half of the year, led by China.
"From a total company view, we are tracking to ourexpectations for the full year and continue to capitalize on theinvestments we are making to better position Pfizer forlong-term success," he added.
Pfizer reiterated that it expected full-year earnings of$2.10 to $2.20 per share.
LIPITOR, PREVNAR TAKE HITS
It reported global sales of $12.97 billion, slightly lowerthan Wall Street estimates of $13.02 billion.
The 7 percent fall in quarterly revenue reflected anoperational decline of 4 percent and an unfavorable impact fromforeign exchange of 3 percent.
The biggest hit came from losses of exclusivity on Lipitor,while shifts in government purchasing patterns for bulk ordersof Pfizer's Prevnar pneumococcal vaccine also took a toll.
The U.S. drugmaker's determination to reshape its businessis part of a wider trend among pharmaceutical companies aroundthe world to divest slower-growing and maturing operations.
Abbott Laboratories' decision to split off itsinnovative drugs into AbbVie Inc, in particular, hasfueled a rethinking across the industry as to whether othercompanies or groups of investors may be better owners forcertain assets.
In Europe, GlaxoSmithKline Plc is also selling offcertain non-core brands, and in April it took a similar tack toPfizer by opting to bundle many of its established drugs into anew unit.
Last November, Pfizer sold its nutrition business to NestleSA for $11.85 billion in cash, and in February spunoff its animal health business into a new company called ZoetisInc.