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Key Takeaways
- Pfizer’s stock rose Wednesday after first-quarter revenue and earnings fell less than expected.
- Revenue for Pfizer from non-COVID-related products offset some of the waning demand for vaccines and treatments against the virus.
- The company affirmed its revenue guidance for the year and boosted its profit outlook after committing to savings measures that could yield about $4 billion.
Pfizer ( PFE ) shares rose Wednesday after first-quarter earnings and revenue fell less than expected, with the decline partially offset by sales growth in the company’s non-COVID-related products.
Expected Revenue, Profit Declines as COVID Demand Wanes
Revenue for the three months ending March fell 20% year-over-year to $14.88 billion, but still came in higher than the $13.95 billion analyst estimates compiled by Visible Alpha.
Net income was 44% lower at $3.12 billion, or 55 cents per share from last year’s mark of $5.54 billion and 97 cents per diluted share. The company posted adjusted net income, which doesn’t account for items such as impact of intangibles or discontinued operations among others, of $4.67 billion or 82 cents per diluted share .
The decreases in revenue and profits were largely thanks to an overall drop of 19% in pharmaceutical sales. However, sales outside of the company’s COVID vaccine and treatment drug Paxlovid increased 11% compared with last year.
Pfizer’s revenue has come down in recent quarters from the record levels it reached once the company rolled out its COVID vaccine and governments and hospitals around the world spent billions on the vaccines and treatment drugs like Paxlovid.
On Track for Cost-Cutting Goals
Pfizer is progressing toward its goal of cutting an estimated $4 billion in costs by the end of 2024, the company said.
“I am very pleased by the strong 11% operational revenue growth of our non-COVID products in the first quarter, demonstrating our focus on commercial execution,” Chief Financial Officer (CFO) David Denton said. “In addition, we continue to progress our cost realignment program and remain on track to deliver on our targeted cost savings goal by the end of the year.”
Affirms Full-Year Revenue Guidance, EPS Projection Gets Boost
Pfizer also affirmed its full-year guidance, projecting total revenue to fall within a range of $58.5 billion to $61.5 billion, with analysts expecting roughly $59.81 billion. The company’s estimates includes roughly $3.1 billion of revenue from legacy Seagen products , as operations align after the acquisition was completed last December.
Pfizer also increased its projections for full-year adjusted diluted earnings per share (EPS) to a range of $2.15 to $2.35, up from the previous range of $2.05 to $2.25 and compared with analyst projections of $2.21 per share. The company said the change was due to its progression in cost-cutting efforts, along with “confidence in the underlying strength in our business.”
The company also said it doesn’t currently anticipate using any of its remaining $3.3 billion in its existing stock buyback program this year. Pfizer announced its second-quarter dividend last week, planning to pay out 42 cents per share for the second consecutive quarter on June 14.
Pfizer shares rose 4.6% to trade at $26.80 at about 1:30 p.m. ET Wednesday. However, the stock has lost almost a third of its value over the last 12 months.