Pfizer cuts revenue forecast as supply snags, dollar strength weigh
Published Oct 30, 2018 10:24AM ET
Pfizer cuts revenue forecast as supply snags, dollar strength weigh
By Tamara Mathias and Aakash B
(Reuters) - Pfizer Inc (N:PFE) on Tuesday reported worse-than-expected third quarter revenue and lowered the top end of its full-year sales forecast as generic competition and drug pricing pressure in the United States hurt its older drugs business.
Pfizer said it now expects 2018 revenue of between $53 billion and $53.7 billion, compared with an earlier forecast of $53 billion to $55 billion.
Sales of breast cancer medicine Ibrance and rheumatoid arthritis drug Xeljanz, both considered growth-drivers for the company, also disappointed in the quarter and shares of the largest U.S. drugmaker declined 3.2 percent in premarket trading.
Investor attention has been increasingly focused on the company post-2020, with a view toward drugs they hope will be on the market by then, including the non-opioid pain treatment tanezumab, Credit Suisse (SIX:CSGN) analyst Vamil Divan said.
However, shareholders are keen to know how the company plans to bridge the gap until 2020 with products such as Ibrance and Xeljanz underperforming this quarter, he added.
Ibrance sales for the quarter of $1.03 billion was below analysts' estimates of about $1.07 billion, according to Refinitiv data. Xeljanz brought in $432 million, also short of estimates of about $476.3 million.
Pfizer, which gets just over half of its revenue from outside the United States, said strengthening of the dollar in relation to the euro and certain emerging market currencies led to diminished revenue projections.
"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 said.
Supply problems at facilities making Pfizer's sterile injectables, as well as competition from cheaper generic medicines in the United States, hit sales at the company's Essential Health business.
Sales from the unit, which Pfizer plans to reorganize into a new division that sells off-patent medicines and generic drugs, fell 4.4 percent to $4.83 billion in the quarter.
Excluding one-time items, Pfizer earned 78 cents per share, topping analysts' average expectations by 3 cents, according to Refinitiv.
The company said it benefited from a 13.3 percent tax rate on adjusted income, well below the 23.7 percent it paid last year before the U.S. Congress passed a bill that significantly lowered corporate tax rates.
Net income rose 45 percent to $4.11 billion in the three months ended Sept. 30.
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Overall revenue for the quarter edged 1 percent higher to $13.30 billion. Analysts had expected $13.53 billion.
Written By: Reuters
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