Pfizer: Bad Quarter, Good Year, Better Outlook
Shares of Pfizer (NYSE:PFE) climbed as much as 2.4 percent in early trading on Tuesday after the biopharmaceutical company reported mixed fourth-quarter and full-year results. Fourth-quarter reported revenues contracted 2 percent on the year to $13.56 billion, falling below the mean analyst estimate of $16.27 billion, but adjusted earnings increased 22 percent on the year to 56 cents per share, beating the mean analyst estimate of 52 cents per share. Adjusted income increased 9 percent to $3.69 billion.
It’s important to note that adjusted fourth-quarter earnings “were significantly unfavorably impacted by the non-recurrence of income from discontinued operations attributable to the company’s Animal Health and Nutrition businesses, including the gain on the sale of the Nutrition business, in the year-ago quarter,” per the company. Reported (unadjusted) fourth-quarter net income fell 59 percent on the year to $2.57 billion, while earnings fell 54 percent to 39 cents per share.
“The just-completed year was highlighted by solid financial performance and shareholder-friendly capital allocation, a strengthening of our innovative core as well as the formation of our new commercial structure designed to enable each business to have a sharper focus on its distinct market opportunities and challenges,” said Pfizer chairman and CEO Ian Read. “We enter 2014 with confidence in the competitive positioning of our commercial businesses, the prospects for our recently launched products and the strength of our research pipeline.”
Whether Read’s optimism is well founded remains to be seen. Pfizer stock took a plunge — falling from about 5.1 percent from $31.27 to $29.66 — in the days before the earnings report following news that its lung cancer drug, dacomitinib, failed to meet its objectives in phase 3 trials. Dacomitinib is an investigational compound that has not been approved by regulatory bodies in any country. The drug has so far failed the two out of three different studies involved in the phase 3 trials (the third trial is underway).