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Pfizer, Inc. (PFE - Free Report) reported fourth-quarter adjusted earnings per share of 47 cents, missing the Zacks Consensus Estimate of 50 cents by 6%.
Earnings also declined 11% year over year due to lower revenues than year-ago quarter.
On the other hand, revenues beat expectations. The pharma heavyweight posted revenues of $13.63 billion, higher than the Zacks Consensus Estimate of $13.55 billion. Again, revenues declined 3% from the year-ago period. Fewer selling days compared to the year-ago quarter hurt results in the fourth quarter.
Pfizer’s shares have declined 3.7% so far this year, compared with a decrease of 1.7% for the Zacks classified Large-Cap Pharma industry.
Sales in Detail
While currency movement impacted Pfizer’s fourth-quarter revenues by 2% ($228 million), operational growth was down 1% ($191 million).
Pfizer’s standalone business (excluding the impact of foreign exchange, and the legacy Hospira and Medivation operations) recorded revenues of $12.32 billion, down 2% year over year on an operational basis. Hospira contributed $1.17 billion to sales.
Top-line growth was driven by the inclusion of Hospira/Medivation sales and strong performance of key products like Ibrance (breast cancer), Lyrica (neuropathic pain) and Xeljanz (rheumatoid arthritis) which offset lower sales of the Prevnar/Prevenar 13 vaccines franchise. Revenues also continued to be hurt by the loss of exclusivity for some products.
International revenues declined 7% (4% on an operational basis) to $6.82 billion. Meanwhile, U.S. revenues rose 1% to $6.81 billion.
Segment Discussion
From the second quarter of 2016, Pfizer has reorganized its reporting segments to Pfizer Innovative Health (IH) and Pfizer Essential Health (EH).
Pfizer IH sales grew 1% (up 2% operationally) from the year-ago period to $7.73 billion.
Pfizer IH revenues were driven by persistently strong momentum of Ibrance in the U.S., robust operational growth of Eliquis globally, and growth of Lyrica and Xeljanz primarily in the U.S. Revenues from the blockbuster prostate cancer drug Xtandi, added to Pfizer’s portfolio following the Sep 2016 Medivation acquisition, also propelled U.S. revenues. This was partially offset by continued decline in revenues from Prevnar 13 for adults in the U.S. and lower revenues of Enbrel (down 22%) in key European markets due to biosimilar competition. Pfizer has exclusive rights to Amgen, Inc.’s (AMGN - Free Report) blockbuster rheumatoid arthritis (RA) drug, Enbrel, outside the U.S. and Canada.
Prevnar revenues tanked 33% in the U.S. due to “high initial capture rate” of the eligible adult patient population following Prevnar-13’s successful 2014 launch, which resulted in a smaller remaining “catch up” opportunity in the fourth quarter compared to the year-ago quarter.
The 2015 expiration of the collaboration agreement to co-promote Rebif in the U.S. also hurt revenues.
Consumer Healthcare revenues rose 2% to $950 million. Global Oncology revenues surged 46% to $1.36 billion driven by Xalkori and Ibrance. Global Vaccine revenues declined 22% to $1.5 billion. Internal Medicine rose 9% to $2.30 billion while the Inflammation & Immunology franchise declined 4% to $1.02 billion. The Rare Disease portfolio declined 7% to $602 million.
Pfizer EH segment sales recorded a decline of 8% (down 6% operationally) to $5.90 billion.
EH revenues were hurt by the loss of exclusivity and associated generic competition for products like Zyvox, Celebrex, Lyrica; and lower revenues from legacy Hospira products
Pfizer launched Inflectra, a biosimilar version of Johnson & Johnson (JNJ - Free Report) and Merck & Co., Inc.’s (MRK - Free Report) blockbuster RA drug Remicade, in November last year. Inflectra recorded sales of $4 million in the U.S. and $61 million globally. All other biosimilars brought in sales of $30 million (down 8%), all from outside U.S. markets.
Adjusted selling, informational and administrative (SI&A) expenses declined 4% during the quarter to $4.40 billion. Adjusted R&D expenses rose 8% to $2.51 billion.
2016 Results
Full-year sales rose 8% to $52.82 billion, falling short of the Zacks Consensus Estimate of $52.89 billion. Sales were, however, within the guidance range of $52 billion to $53 billion.
Adjusted earnings for 2016 were $2.40 per share, missing the Zacks Consensus Estimate of $2.41. Nevertheless, earnings were up 9% year over year. Reported earnings were within the guided range of $2.38–$2.43 per share.
The Hospira acquisition contributed $1.2 billion to revenues and 3 cents to adjusted earnings per share in 2016.
2017 Guidance
Pfizer’s 2017 sales outlook fell short of expectations. Revenues are expected in the range of $52 billion to $54 billion. This is lower than the Zacks Consensus Estimate of $54.26 billion.
Adjusted earnings per share are expected in the range of $2.50–$2.60. The Zacks Consensus Estimate stands at $2.56.
R&D expenses are expected in the range of $7.5–$8.0 billion, while SI&A spending is projected in the range of $13.7–$14.7 billion.
The guidance includes $0.9 billion negative impact from foreign exchange, $1.2 billion from the pending sale of the Hospira infusion systems business to medical device maker ICU Medical, and $2.4 billion from loss of exclusivity on products.
Our Take
Though Pfizer missed earnings estimates in the fourth quarter, it beat on sales. However, the company’s 2017 sales outlook was disappointing, causing shares to lose more than 1% in pre-market trading.
Pfizer continues to face headwinds in the form of genericization, pricing pressure and rising competition. Nonetheless, we believe that new product sales, contribution from acquisitions, cost-cutting efforts and share buybacks should help the company achieve its guidance. Investor focus will remain on the stock as Pfizer has several key pipeline milestones in 2017.
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Pfizer (PFE) Q4 Earnings Lag, Sales Top; '17 Sales View Soft
Pfizer, Inc. (PFE - Free Report) reported fourth-quarter adjusted earnings per share of 47 cents, missing the Zacks Consensus Estimate of 50 cents by 6%.
Earnings also declined 11% year over year due to lower revenues than year-ago quarter.
On the other hand, revenues beat expectations. The pharma heavyweight posted revenues of $13.63 billion, higher than the Zacks Consensus Estimate of $13.55 billion. Again, revenues declined 3% from the year-ago period. Fewer selling days compared to the year-ago quarter hurt results in the fourth quarter.
Pfizer’s shares have declined 3.7% so far this year, compared with a decrease of 1.7% for the Zacks classified Large-Cap Pharma industry.
Sales in Detail
While currency movement impacted Pfizer’s fourth-quarter revenues by 2% ($228 million), operational growth was down 1% ($191 million).
Pfizer’s standalone business (excluding the impact of foreign exchange, and the legacy Hospira and Medivation operations) recorded revenues of $12.32 billion, down 2% year over year on an operational basis. Hospira contributed $1.17 billion to sales.
Top-line growth was driven by the inclusion of Hospira/Medivation sales and strong performance of key products like Ibrance (breast cancer), Lyrica (neuropathic pain) and Xeljanz (rheumatoid arthritis) which offset lower sales of the Prevnar/Prevenar 13 vaccines franchise. Revenues also continued to be hurt by the loss of exclusivity for some products.
International revenues declined 7% (4% on an operational basis) to $6.82 billion. Meanwhile, U.S. revenues rose 1% to $6.81 billion.
Segment Discussion
From the second quarter of 2016, Pfizer has reorganized its reporting segments to Pfizer Innovative Health (IH) and Pfizer Essential Health (EH).
Pfizer IH sales grew 1% (up 2% operationally) from the year-ago period to $7.73 billion.
Pfizer IH revenues were driven by persistently strong momentum of Ibrance in the U.S., robust operational growth of Eliquis globally, and growth of Lyrica and Xeljanz primarily in the U.S. Revenues from the blockbuster prostate cancer drug Xtandi, added to Pfizer’s portfolio following the Sep 2016 Medivation acquisition, also propelled U.S. revenues. This was partially offset by continued decline in revenues from Prevnar 13 for adults in the U.S. and lower revenues of Enbrel (down 22%) in key European markets due to biosimilar competition. Pfizer has exclusive rights to Amgen, Inc.’s (AMGN - Free Report) blockbuster rheumatoid arthritis (RA) drug, Enbrel, outside the U.S. and Canada.
Prevnar revenues tanked 33% in the U.S. due to “high initial capture rate” of the eligible adult patient population following Prevnar-13’s successful 2014 launch, which resulted in a smaller remaining “catch up” opportunity in the fourth quarter compared to the year-ago quarter.
The 2015 expiration of the collaboration agreement to co-promote Rebif in the U.S. also hurt revenues.
Consumer Healthcare revenues rose 2% to $950 million. Global Oncology revenues surged 46% to $1.36 billion driven by Xalkori and Ibrance. Global Vaccine revenues declined 22% to $1.5 billion. Internal Medicine rose 9% to $2.30 billion while the Inflammation & Immunology franchise declined 4% to $1.02 billion. The Rare Disease portfolio declined 7% to $602 million.
Pfizer EH segment sales recorded a decline of 8% (down 6% operationally) to $5.90 billion.
EH revenues were hurt by the loss of exclusivity and associated generic competition for products like Zyvox, Celebrex, Lyrica; and lower revenues from legacy Hospira products
Pfizer launched Inflectra, a biosimilar version of Johnson & Johnson (JNJ - Free Report) and Merck & Co., Inc.’s (MRK - Free Report) blockbuster RA drug Remicade, in November last year. Inflectra recorded sales of $4 million in the U.S. and $61 million globally. All other biosimilars brought in sales of $30 million (down 8%), all from outside U.S. markets.
Adjusted selling, informational and administrative (SI&A) expenses declined 4% during the quarter to $4.40 billion. Adjusted R&D expenses rose 8% to $2.51 billion.
2016 Results
Full-year sales rose 8% to $52.82 billion, falling short of the Zacks Consensus Estimate of $52.89 billion. Sales were, however, within the guidance range of $52 billion to $53 billion.
Adjusted earnings for 2016 were $2.40 per share, missing the Zacks Consensus Estimate of $2.41. Nevertheless, earnings were up 9% year over year. Reported earnings were within the guided range of $2.38–$2.43 per share.
The Hospira acquisition contributed $1.2 billion to revenues and 3 cents to adjusted earnings per share in 2016.
2017 Guidance
Pfizer’s 2017 sales outlook fell short of expectations. Revenues are expected in the range of $52 billion to $54 billion. This is lower than the Zacks Consensus Estimate of $54.26 billion.
Adjusted earnings per share are expected in the range of $2.50–$2.60. The Zacks Consensus Estimate stands at $2.56.
R&D expenses are expected in the range of $7.5–$8.0 billion, while SI&A spending is projected in the range of $13.7–$14.7 billion.
The guidance includes $0.9 billion negative impact from foreign exchange, $1.2 billion from the pending sale of the Hospira infusion systems business to medical device maker ICU Medical, and $2.4 billion from loss of exclusivity on products.
Our Take
Though Pfizer missed earnings estimates in the fourth quarter, it beat on sales. However, the company’s 2017 sales outlook was disappointing, causing shares to lose more than 1% in pre-market trading.
Pfizer continues to face headwinds in the form of genericization, pricing pressure and rising competition. Nonetheless, we believe that new product sales, contribution from acquisitions, cost-cutting efforts and share buybacks should help the company achieve its guidance. Investor focus will remain on the stock as Pfizer has several key pipeline milestones in 2017.
Pfizer, Inc. Price, Consensus and EPS Surprise
Pfizer, Inc. Price, Consensus and EPS Surprise | Pfizer, Inc. Quote
Pfizer carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Zacks' Top 10 Stocks for 2017
In addition to the stocks discussed above, would you like to know about our 10 finest tickers for the entirety of 2017?
Who wouldn't? These 10 are painstakingly hand-picked from 4,400 companies covered by the Zacks Rank. They are our primary picks to buy and hold. Be among the very first to see them >>