Pfizer’s Strong Fourth-Quarter Performance Beyond COVID Products
Pfizer has reported a robust fourth-quarter performance, surpassing expectations and indicating resilience beyond its COVID-19 vaccine and treatment products. The New York-based pharmaceutical giant, on Tuesday, reiterated its confidence in its 2024 forecast, a month after delivering an initial outlook that initially fell short of consensus estimates.
Diverse Revenue Growth: Beyond Comirnaty and Paxlovid
In the fourth quarter, Pfizer demonstrated an impressive 8% operational revenue growth, excluding the impact of foreign exchanges, propelled by-products outside its flagship COVID-19 vaccine, Comirnaty, and the treatment Paxlovid. Comirnaty’s sales experienced a significant 53% decline, totaling $5.4 billion, and an additional setback of $3.1 billion from Paxlovid due to a revenue reversal linked to the return of unused treatment courses initially procured by the government.
Strategic Shift and Sales Dynamics
While the vaccine and treatment were pivotal in Pfizer exceeding $100 billion in sales for 2022, a substantial sales drop was anticipated following the company’s strategic shift last year. Pfizer transitioned from relying on bulk government contracts to selling on the commercial market. Despite this anticipated decline, a Pfizer spokesperson expressed optimism, indicating the company’s expectation of recovering some of the lost revenue from Paxlovid in the current year. Pfizer is set to contribute to a government stockpile of treatment courses and establish a patient assistance program.
Financial Overview: Losses, Adjusted Earnings, and Revenue
Despite reporting a loss of $3.37 billion in the final quarter of 2023, following a nearly $5 billion profit in the corresponding quarter of the previous year, Pfizer’s adjusted earnings for one-time items amounted to 10 cents per share. This surpassed analysts’ expectations, with FactSet data indicating an anticipated loss of 18 cents per share.
Pfizer’s total revenue for the fourth quarter witnessed a 41% decline to $14.25 billion, slightly below the consensus expectation of $14.37 billion. For the entire year, Pfizer recorded earnings of $2.1 billion on total revenue of $58.5 billion.
Looking Ahead: 2024 Outlook and Analyst Expectations
Looking ahead to 2024, Pfizer maintains an optimistic outlook, projecting adjusted earnings to range between $2.05 and $2.25 per share. Analysts, however, have set expectations at $2.27 per share for the current year. Notably, Wall Street’s expectations have been tempered from previous consensus forecasts made in the fall, which initially anticipated earnings per share of $3.17 or higher.
Navigating Challenges: Conservative Approach and Market Dynamics
Pfizer’s unveiling of its 2024 forecast in December included sales projections for its COVID-19 products that fell over $5 billion short of expectations. The company clarified that it adopted a conservative approach to mitigate uncertainty. This decision followed Pfizer’s earlier scaling back of sales expectations for 2023, resulting in a significant decline in Pfizer shares and contributing to a challenging year for the stock.
Resilience and Future Prospects
Despite these challenges, Pfizer Inc. shares exhibited resilience, rising approximately 3% in early trading on Tuesday. The company’s ability to navigate evolving market dynamics, coupled with its ongoing commitment to contributing to public health initiatives, positions Pfizer for continued success in the pharmaceutical landscape.