Pfizer Inc., the world's largest drug maker, reported third-quarter profit that topped analysts' expectations based on U.S. growth of their cholesterol block-buster drug Lipitor, favorable foreign exchange rates and increases in overseas sales.

The drug giant's net income was $3.7 billion, compared with $866 million in the prior-year quarter. It reported earnings per share increased to $0.48, compared with $0.11 in the prior-year quarter.

Pfizer's net income increased 60 percent over the first three quarters in 2011 compared with 2010, driven by factors including a $1.3 billion after-tax gain on the sale of Capsugel, a wholesale pill casing manufacturer. Pfizer sold its Capsugel unit to KKR & Co. in April for $2.38 billion, Bloomberg reported. Gains also came from $1.5 billion pre-tax assets from Pfizer's 2009 acquisition of Wyeth.

Revenues reached $17.2 billion, a 7 percent increase from the prior-year quarter. International revenues for Pfizer increased 15 percent even as domestic revenues shrank by 3 percent, compared with the prior-year quarter.

The domestic market gains in Lipitor were offset by the drug's lost of exclusivity in several countries including Canada, Spain, Brazil and Mexico in the third quarter. Lipitor, the world's best-selling drug, will lose its patent protection in November.

The quarters ahead will be softer once Lipitor gets generic rivals, Tony Butler, an analyst with Barclays Capital in New York told Bloomberg. Growth instead will come from the vaccine Prevnar 13 for adults, for which Pfizer is seeking approval from the U.S. Food and Drug Administration, he said.

The animal health sector drove up the biggest percentage gains with 21 percent growth in revenues from additional products and a favorable global livestock market and foreign exchange.

Overall, I am very pleased with our financial performance despite the impact of product losses of exclusivity totaling approximately $950 million this quarter and the challenges posed by current global market and economic conditions, Ian Read, Pflizer president and CEO stated in a release. Excluding the impact of product losses of exclusivity, all of our businesses generated revenue growth while effectively managing their cost structures.

Based on the favorable quarter, Pfizer will increase their adjusted diluted earnings per share from $2.24 to $2.29.

The increases come at a time when Pfizer is undergoing a stock repurchase campaign. In 2011, the company repurchased $6.5 billion, or 331.6 million shares, $2.1 billion worth in the third quarter, said Chief Financial Officer Frank D'Amelio in a statement.

Pfizer stock rose 2.26 percent to $19.695 a share at 11:41 a.m. EST on the positive news.