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Pfizer (PFE) to Report Q3 Earnings: Here's What to Expect
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Pfizer (PFE - Free Report) will report third-quarter 2023 results on Oct 31, before market open. In the last reported quarter, the company beat earnings expectations by 19.64%.
Factors to Note
Pfizer’s revenues are expected to have decreased in the third quarter of 2023 due to steep expected declines in revenues from its COVID-19 products on lower demand.
Pfizer records direct sales and alliance revenues from its partner, BioNTech for the COVID-19 vaccine, Comirnaty, and product revenues from its oral antiviral pill for COVID, Paxlovid.
In the second quarter, sales of several other key medicines like Prevnar, alliance revenues from Eliquis and Ibrance missed expectations. Pfizer said that some near-term individual product challenges hurt its sales performance in the quarter. It remains to be seen if these individual product challenges abated in the third quarter, resulting in better sales of these drugs.
Overall, Pfizer expects better non-COVID operational revenue growth in the third quarter to be driven by its key products like alliance revenues from Eliquis, the Prevnar family of vaccines and Vyndaqel/Vyndamax, new launches as well as newly acquired products like Nurtec and Oxbryta.
The Zacks Consensus Estimate for alliance revenues from Eliquis is $1.52 billion, while our model estimate is $1.50 billion.
The Zacks Consensus Estimate for sales of Prevnar family of vaccines is $1.69 billion while our model estimates Prevnar family vaccine sales to be $1.71 billion.
The Zacks Consensus Estimate for sales of Vyndaqel/Vyndamax is $808.9 million while our model estimates the same to be $815 million.
Some key new product approvals/launches are Cibinqo for atopic dermatitis, Abrysvo RSV vaccine, Zavzpret nasal spray for migraine, Litfulo (ritlecitinib) for severe alopecia areata, Elrexfio (elranatamab) for relapsed/refractory multiple myeloma and Ngenla for pediatric growth hormone deficiency in the same month.
Investors will be keen to know the initial sales numbers of these new products in the third quarter.
Lower revenues from COVID products, coupled with higher spending for near-term launches and late-stage pipeline candidates, are expected to have hurt profits.
Key Recent Updates
Earlier this month, Pfizer slashed its previously issued revenue guidance for 2023 due to lower-than-expected demand for Comirnaty and Paxlovid.
The revenue guidance was lowered from $67.0 to $70.0 billion to $58.0 to $61.0 billion, which includes a $7 billion cut in Paxlovid revenues and a $2 billion reduction in Comirnaty revenues. In the third quarter, Pfizer will record a non-cash charge of $5.5 billion as COVID inventory write-offs in the cost of goods sold. As a result of the lower-than-expected COVID revenues and the inventory write-offs, adjusted EPS is expected in the range of $1.45 to $1.65 in 2023, down from $3.25 to $3.45 expected previously.
With the demand for COVID products coming in lower than expected, Pfizer announced cost cuts, including layoffs, which are expected to deliver targeted savings of at least $3.5 billion. Of this, approximately $1.0 billion is expected to be realized in 2023 and at least $2.5 billion is expected to be realized in 2024.
Earnings Surprise History
The drug giant’s performance has been strong, with the company exceeding earnings expectations in each of the last four quarters. The company delivered a four-quarter earnings surprise of 18.60% on average.
Pfizer’s stock has declined 39.8% year to date against an increase of 4.6% for the industry.
Image Source: Zacks Investment Research
Earnings Whispers
Our proven model does not conclusively predict an earnings beat for Pfizer this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that is not the case here.
Earnings ESP: Pfizer’s Earnings ESP is 0.0% as both the Zacks Consensus Estimate as well as the Most Accurate Estimate are pegged a loss of 19 cents per share. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Pfizer has a Zacks Rank #3.
Stocks to Consider
Here are some large drug/biotech stocks that have the right combination of elements to beat on earnings this time around:
AstraZeneca’s stock has declined 7.0% so far this year. AstraZeneca beat earnings estimates in the last four quarters. AZN has a four-quarter positive earnings surprise of 8.38%, on average. AstraZeneca is scheduled to release its third-quarter results on Nov 9.
Biogen (BIIB - Free Report) has an Earnings ESP of +3.41% and a Zacks Rank #3.
Biogen’s stock has declined 8.5% year to date. Biogen topped earnings estimates in the last four quarters. BIIB has a four-quarter positive earnings surprise of 10.53%, on average. BIIB is scheduled to release its third-quarter results on Nov 8.
Vertex Pharmaceuticals Incorporated (VRTX - Free Report) has an Earnings ESP of +1.25% and a Zacks Rank #3.
Vertex’s stock is up 27.3% so far this year. The company beat earnings estimates in the last four quarters. VRTX has a four-quarter positive earnings surprise of 4.91%, on average. VRTX is scheduled to release its third-quarter results on Nov 6.
Image: Bigstock
Pfizer (PFE) to Report Q3 Earnings: Here's What to Expect
Pfizer (PFE - Free Report) will report third-quarter 2023 results on Oct 31, before market open. In the last reported quarter, the company beat earnings expectations by 19.64%.
Factors to Note
Pfizer’s revenues are expected to have decreased in the third quarter of 2023 due to steep expected declines in revenues from its COVID-19 products on lower demand.
Pfizer records direct sales and alliance revenues from its partner, BioNTech for the COVID-19 vaccine, Comirnaty, and product revenues from its oral antiviral pill for COVID, Paxlovid.
In the second quarter, sales of several other key medicines like Prevnar, alliance revenues from Eliquis and Ibrance missed expectations. Pfizer said that some near-term individual product challenges hurt its sales performance in the quarter. It remains to be seen if these individual product challenges abated in the third quarter, resulting in better sales of these drugs.
Overall, Pfizer expects better non-COVID operational revenue growth in the third quarter to be driven by its key products like alliance revenues from Eliquis, the Prevnar family of vaccines and Vyndaqel/Vyndamax, new launches as well as newly acquired products like Nurtec and Oxbryta.
The Zacks Consensus Estimate for alliance revenues from Eliquis is $1.52 billion, while our model estimate is $1.50 billion.
The Zacks Consensus Estimate for sales of Prevnar family of vaccines is $1.69 billion while our model estimates Prevnar family vaccine sales to be $1.71 billion.
The Zacks Consensus Estimate for sales of Vyndaqel/Vyndamax is $808.9 million while our model estimates the same to be $815 million.
Some key new product approvals/launches are Cibinqo for atopic dermatitis, Abrysvo RSV vaccine, Zavzpret nasal spray for migraine, Litfulo (ritlecitinib) for severe alopecia areata, Elrexfio (elranatamab) for relapsed/refractory multiple myeloma and Ngenla for pediatric growth hormone deficiency in the same month.
Investors will be keen to know the initial sales numbers of these new products in the third quarter.
Lower revenues from COVID products, coupled with higher spending for near-term launches and late-stage pipeline candidates, are expected to have hurt profits.
Key Recent Updates
Earlier this month, Pfizer slashed its previously issued revenue guidance for 2023 due to lower-than-expected demand for Comirnaty and Paxlovid.
The revenue guidance was lowered from $67.0 to $70.0 billion to $58.0 to $61.0 billion, which includes a $7 billion cut in Paxlovid revenues and a $2 billion reduction in Comirnaty revenues. In the third quarter, Pfizer will record a non-cash charge of $5.5 billion as COVID inventory write-offs in the cost of goods sold. As a result of the lower-than-expected COVID revenues and the inventory write-offs, adjusted EPS is expected in the range of $1.45 to $1.65 in 2023, down from $3.25 to $3.45 expected previously.
With the demand for COVID products coming in lower than expected, Pfizer announced cost cuts, including layoffs, which are expected to deliver targeted savings of at least $3.5 billion. Of this, approximately $1.0 billion is expected to be realized in 2023 and at least $2.5 billion is expected to be realized in 2024.
Earnings Surprise History
The drug giant’s performance has been strong, with the company exceeding earnings expectations in each of the last four quarters. The company delivered a four-quarter earnings surprise of 18.60% on average.
Pfizer Inc. Price and EPS Surprise
Pfizer Inc. price-eps-surprise | Pfizer Inc. Quote
Pfizer’s stock has declined 39.8% year to date against an increase of 4.6% for the industry.
Image Source: Zacks Investment Research
Earnings Whispers
Our proven model does not conclusively predict an earnings beat for Pfizer this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that is not the case here.
Earnings ESP: Pfizer’s Earnings ESP is 0.0% as both the Zacks Consensus Estimate as well as the Most Accurate Estimate are pegged a loss of 19 cents per share. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Pfizer has a Zacks Rank #3.
Stocks to Consider
Here are some large drug/biotech stocks that have the right combination of elements to beat on earnings this time around:
AstraZeneca (AZN - Free Report) has an Earnings ESP of +5.13% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.
AstraZeneca’s stock has declined 7.0% so far this year. AstraZeneca beat earnings estimates in the last four quarters. AZN has a four-quarter positive earnings surprise of 8.38%, on average. AstraZeneca is scheduled to release its third-quarter results on Nov 9.
Biogen (BIIB - Free Report) has an Earnings ESP of +3.41% and a Zacks Rank #3.
Biogen’s stock has declined 8.5% year to date. Biogen topped earnings estimates in the last four quarters. BIIB has a four-quarter positive earnings surprise of 10.53%, on average. BIIB is scheduled to release its third-quarter results on Nov 8.
Vertex Pharmaceuticals Incorporated (VRTX - Free Report) has an Earnings ESP of +1.25% and a Zacks Rank #3.
Vertex’s stock is up 27.3% so far this year. The company beat earnings estimates in the last four quarters. VRTX has a four-quarter positive earnings surprise of 4.91%, on average. VRTX is scheduled to release its third-quarter results on Nov 6.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.