Pfizer Earnings: Here’s Why the Stock is Healthier Today

Pfizer Inc. (NYSE:PFE) delivered a profit and beat Wall Street’s expectations, AND beat the revenue expectation. The revenue beat is a positive sign to shareholders seeking high growth out of the company. Shares are up 0.78%.

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Pfizer Inc. Earnings Cheat Sheet

Results: Net income increased 337.8% to $6.3 billion (47 cents per diluted share) in the quarter versus a net gain of $1.44 billion in the year-earlier quarter.

Revenue: Decreased 10.01% to $15.07 billion from the year-earlier quarter.

Actual vs. Wall St. Expectations: Pfizer Inc. reported adjusted net income of 47 cents per share. By that measure, the company beat the mean analyst estimate of $0.44. It beat the average revenue estimate of $14.37 billion.

Quoting Management:

Frank D’Amelio, Chief Financial Officer, stated, “Overall, I am pleased with our 2012 financial performance, our recent product approvals and our expense reductions, as evidenced by the $4.5 billion decline in adjusted cost of sales, SI&A expenses and R&D expenses(2) in the aggregate compared with 2011. Additionally, we completed an important strategic initiative through the sale of our Nutrition(1) business to Nestlé, and are ready to execute on another important strategic initiative with the potential initial public offering of up to a 19.8% stake in Zoetis(4), after having recently completed a related $3.65 billion debt offering. We continue to expect to allocate the proceeds from these transactions to share repurchases while also considering other value-creating opportunities, with the return on share repurchases remaining the case to beat…

…We are also providing our initial 2013 financial guidance, including a range for revenues of $56.2 to $58.2 billion and for adjusted diluted EPS(2) of $2.20 to $2.30. Our guidance reflects the benefit of a full-year contribution from Zoetis(4), partially offset by an unfavorable $0.02 adjusted(2) and reported(3) diluted EPS impact for Zoetis(4)-related interest expense associated with the $3.65 billion debt offering and certain duplicative and other costs given the potential separation of Zoetis(4). Additionally, our revenue guidance reflects the anticipated negative impact of approximately $4 billion due to product losses of exclusivity and the near-term expiration of certain co-promotion agreements. We expect adjusted SI&A expenses(2) tobe between $15.6 billion and $16.6 billion, with the mid-point below the 2012 level. Notably, we expect SI&A expenses will include substantial expenses associated with the launches of various key medicines, including Eliquis, Xeljanz and Prevnar/Prevenar 13 for adults, but plan to essentially offset those incremental expenses through our cost-reduction initiatives. Lastly, we expect to continue to deploy significant capital to share repurchases during the year,” concluded Mr. D’Amelio

Key Stats:

Revenue increased 7.83% from $13.98 billion in the previous quarter. Net income increased 96.38% from $3.21 billion in the previous quarter.

Looking Forward: Analysts have a more negative outlook for the company’s next-quarter performance. Over the past three months, the average estimate for next quarter’s earnings has fallen from a profit of $0.56 to a profit $0.55. For the current year, the average estimate has moved down from a profit of $2.21 to a profit of $2.16 over the last ninety days.

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(Company fundamentals provided by Xignite Financials.)