Pfizer surprises with Q4 profit as primary-care sales offset covid slump

Updated at 9:37 AM EST

Pfizer  (PFE) - Get Free Report posted a surprise fourth-quarter profit Tuesday, while sticking to its 2024 earnings forecasts, as better-than-expected sales from its primary-care division offset the ongoing slide in covid-related revenue. 

Pfizer said adjusted earnings for the three months ended in December were 10 cents a share, down from a profit of $1.14 over the same period a year earlier but well inside the Wall Street consensus forecast of a loss of 22 cents a share.

Group revenue, Pfizer said, fell 41.4% to $14.25 billion, narrowly missing analysts' estimates of a $14.4 billion tally, thanks to what the company called an "expected decline in Comirnaty and Paxlovid" sales, referencing its Covid antiviral treatment and vaccine.

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Slumping vaccine sales, which pushed overall revenue past $100 billion in 2022, forced the drugmaker to lower its 2023 profit projections in October. 

Pfizer told investors at the time that it would write off around $4.6 billion in inventories of Paxlovid, its oral covid treatment, and booked a further $5.5 billion noncash charge against its third-quarter earnings.

Pfizer also affirmed its 2024 profit guidance, with a range of between $2.05 to $2.25 per share that includes a 40-cent hit from its $43 billion acquisition of cancer-drug specialist Seagen.

Group revenue, Pfizer said, should range between $58.5 billion and $61.5 billion. 

“We are encouraged by the strong performance of our non-covid products in the fourth quarter of 2023, including significant contributions from new launches and robust year-over-year growth for several key in-line brands," said CEO Albert Bourla.

"We are entering 2024 with a solid foundation," he added. "We believe our commitment to execution, maximizing the performance of our new products, and delivering the next wave of pipeline innovation will fuel Pfizer’s growth and make a difference in the lives of patients everywhere.” 

Pfizer shares were marked 1.75% higher in early trading immediately following the earnings release to $27.48 each to change hands at $27.87 each, a move that would still leave the stock down nearly 23% over the past six months.

“Digging into the product portfolio, we were surprised to see the weakness with Prevnar as sales of $1.605 billion declined 8% y/y and came in 20% below consensus, which the company explained was due to lower demand and the unfavorable timing of customer orders," said Lee Brown, global sector lead for healthcare at Third Bridge. "We will want to gain a better understanding of the customer order dynamics.”

Last month, Pfizer said it would not advance a study of a two-dose obesity treatment, danuglipron, following a high level of side effects in patients involved in the Phase II trial.

The decision marked a significant setback in Pfizer's ambitions to enter the weight-loss-drug market, which is currently dominated by Novo Nordisk's Wegovy. 

Pfizer rival Eli Lilly  (LLY) - Get Free Report also won approval for its own weight-loss treatment, Zepbound, from the Food and Drug Administration in November.

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