Pfizer’s 3Q profit, up due to tax cut, beats expectations
Pfizer posted a 45 percent jump in third-quarter profit, as the biggest U.S.-based drugmaker benefited from sharply lower taxes due to this year’s federal tax cut.
The maker of Viagra and nerve pain treatment Lyrica on Tuesday reported net income of $4.11 billion, or 69 cents per share.
Adjusted for one-time gains and costs, the New York drugmaker said income came to 78 cents per share, 2 cents better than analysts expected.
Revenue was $13.3 billion, up 1 percent but below analysts’ forecasts for $13.5 billion. Sales were led by Lyrica, stroke-preventing pill Eliquis and the Prevnar 13 vaccine against pneumococcal infections that cause ear aches, blood infections and pneumonia. Sales of sterile injectable medicines were down 3 percent, as shortages continue for older products due to manufacturing deficiencies Pfizer has been trying to resolve for more than a year.
Longtime CEO Ian Read, who will be succeeded in January by Albert Bourla, Pfizer’s chief operating officer, said he’s confident in the new leadership team Bourla is building. Chief Financial Officer Frank D’Amelio, research head Mikael Dolsten and some other long-term executives will remain in their posts, but new execs will be heading Pfizer’s innovative medicines business and its essential heath segment, which sells mostly off-patent drugs.
Read said Pfizer will decide at year’s end whether to hike prices for its many drugs. After President Trump blasted Pfizer on Twitter for price hikes it took in early July, Pfizer reversed those increases temporarily and said it wouldn’t raise product prices before January.
“We have an opportunity over the next five to 10 years to have a profound impact on patients’ health,” Bourla told analysts during a conference call. He added that Pfizer’s consumer business is set for growth and the company will decide by year’s end whether to keep the business or divest it.
Pfizer expects to win approval of at least 12 new drugs, counting Talzenna and Vizimpro, from the beginning of this year through 2022. Those include recently approved breast cancer drug Talzenna and lung cancer drug Vizimpro, plus vaccines against two bacterial infections — Clostridium difficile and Staphylococcus aureus — that together each year kill about 45,000 Americans and cost billions for hospitalizations and other treatment.
Pfizer narrowed its full-year profit forecast to earnings per share of $2.98 to $3.02, from its July forecast of $2.95 to $3.05. The company narrowed and lowered its 2018 revenue forecast to $53 billion to $53.7 billion, down from $53 billion to $55 billion.
“While we are disappointed by the lowered guidance, we recognize that it was the result of factors unrelated to the company’s innovative new product portfolio,” Edward Jones analyst Ashtyn Evans wrote to investors.
Pfizer noted that from January through September, it paid out $6 billion in shareholder dividends and bought back $7.2 billion worth of its shares, leaving it with another $7.4 billion authorized for additional share buybacks.
In midday trading, Pfizer Inc. shares fell $63 cents, or 1.5 percent, to $42.60.
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