Pfizer reported a higher-than-expected adjusted fourth-quarter earnings due to improved performance in its decreasing Covid business.
- KEY POINTS.
- Pfizer reported a surprise adjusted fourth-quarter profit, as the company’s weakening Covid business outperformed expectations.
- The results come after a difficult year for the company, which faced declining demand for its Covid Amedicines as the world recovered from the pandemic.
- Pfizer will have an earnings call for investors on Tuesday at 10 a.m. ET.
The firm lost almost $3.5 billion in sales due to the anticipated return of 6.5 million doses of its Covid medication, Paxlovid, from the US government. That figure is lower than the $4.2 billion Pfizer had anticipated for the return of approximately 8 million doses of Paxlovid. Pfizer’s Covid vaccination generated $5.36 billion in revenue during the quarter, a 53% decrease from the same period last year. According to FactSet, analysts predicted that the shot will generate $4.99 billion in sales.
The findings come as Pfizer attempts to mitigate the rapid collapse of its Covid business, which saw demand fall to new lows and migrate to the commercial market in the United States last year. As revenue declines, the corporation is attempting to improve its bottom line and bolster investor confidence with a massive $4 billion cost-cutting programme.
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Here’s what Pfizer reported for the fourth quarter compared to what Wall Street expected, based on an analyst survey conducted by LSEG, formerly known as Refinitiv.
- Earnings per share: 10 cents per share adjusted vs. loss of 22 cents expected
- Revenue: $14.25 billion vs. $14.42 billion expected
The pharmaceutical company also confirmed its full-year 2024 projection, which it first announced in mid-December. Pfizer estimates sales to range between $58.5 billion and $61.5 billion this year, including around $8 billion in revenue from its Covid products and contributions from its recently completed acquisition of cancer medication development company Seagen.
The company anticipates reporting adjusted earnings of $2.05 to $2.25 per share. Pfizer reported fourth-quarter revenue of $14.25 billion, a 41% decrease from the same period a year earlier, owing to a drop in sales of its Covid medicines. Pfizer reported a fourth-quarter net loss of $3.37 billion, or 60 cents per share. This compared to a net income of $4.99 billion, or 87 cents per share, for the same period last year.
Excluding some factors, the company reported earnings per share of 10 cents for the quarter. Nonetheless, Pfizer’s Covid business had a disappointing 2023. In 2023, revenue from the Covid vaccination and Paxlovid totaled $12.5 billion. That’s 78% lower than its peak of $57 billion in 2022.
Pfizer’s Non-Covid medicines
Excluding Covid products, Pfizer’s fourth-quarter revenue increased 8% operationally. The business stated that its novel respiratory syncytial virus vaccine, which was released in the third quarter for elderly and expecting moms, contributed to its increase. The shot, known as Abrysvo, generated $515 million in fourth-quarter revenue.
The company also reported increased income from robust sales of Vyndaqel medications, which are used to treat a specific type of cardiomyopathy, a heart muscle disorder. Those medications generated $961 million in sales, a 41% increase from the fourth quarter of 2022.
Pfizer also stated that its blood thinner Eliquis, which is co-marketed by Bristol Myers Squibb, contributed to that growth. The medicine generated $1.61 billion in revenue for the quarter, up 9% from the same period last year. According to FactSet, analysts predicted Eliquis’ revenues to total $1.52 billion.
One non-Covid product category performed worse than Pfizer expected. In the fourth quarter, sales of a series of vaccinations to prevent pneumococcal pneumonia totaled $1.60 billion. That was down 8% from the same quarter a year ago, owing to weaker demand and what the company described as “unfavourable timing of customer orders.” According to FactSet, analysts predicted the set of shots would generate $1.97 billion in revenue.
According to Wells Fargo analyst Mohit Bansal, the lacklustre sales for that group of shots, known as Pfizer’s Prevnar family, should be cause for concern. Bansal added that Merck has provided promising commentary on the prospects for its own pneumococcal pneumonia vaccine brand, so he anticipates Pfizer being questioned about how it intends to defend that segment of its business on its fourth-quarter earnings conference call.
The results end a difficult year for a firm that once saw revenue skyrocket after introducing the world’s first Covid vaccination. Pfizer’s stock sank almost 40% in 2023 as global demand for its shot and other Covid products collapsed, forcing the firm to substantially reduce its full-year sales outlook, record multibillion-dollar inventory write-off charges, and initiate a massive cost-cutting programme.
Furthermore, Pfizer’s future in the thriving weight loss medicine market appeared dismal last month. The business discontinued a twice-daily version of its experimental weight loss tablet after obese patients who took the medicine dropped significant weight but had difficulty tolerating it in a mid-stage clinical trial. Investors are expecting the business to release data on a once-daily version of that medicine, called danuglipron, in the first part of the year.
Pfizer hopes that its $43 billion acquisition of Seagen, which was officially concluded in the fourth quarter, will restore investor trust. Last month, the business announced plans to establish a new oncology division that will incorporate Seagen in early 2024, indicating a doubling down on cancer therapies. But Wall Street is sceptical that Pfizer can turn things around: the company’s stock has already down more than 4% this year, putting its market value at around $155 billion. Pfizer will have an earnings call for investors on Tuesday at 10 a.m. ET.
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