Pfizer Inc. (PFE) Earnings To Get Hit By Allergan (ACT)?
Pfizer Inc. (PFE) Health Care – Pharmaceuticals | Reports May 3, Before Market Opens
Charlie Munger: Invert And Use “Disconfirming Evidence”
- The Estimize consensus is calling for earnings per share of $0.56 on $11.99 billion in revenue, 1 cent higher than Wall Street on the bottom line and right in line on top
- The biggest news from Pfizer this quarter has been the scrapped deal with Allergan.
- Pfizer faces meaningful short term threats from mass genericization of key products and ongoing currency headwinds
- What are you expecting for PFE? Get your estimate in here!
Just weeks after the collapse of the largest deal in American history, Pfizer (PFE) is scheduled to report first quarter earnings. The deal between Pfizer and Allergan was recently scratched after new tax reforms made the takeover no longer beneficial. The fallout of the merger should have no bearing on earnings this quarter but disturbs future guidance and the psyche of investors.
For Q1, the Estimize consensus is calling for earnings per share of $0.56 on $11.99 billion in revenue, 1 cent higher than Wall Street on the bottom line and right in line on top. Compared to a year earlier, profits are predicted to increase 9% while sales could rise 11%. Expected growth this quarter is largely consistent with the past few quarters in which Pfizer topped expectations in 4 consecutive quarters. Unfortunately the stock has only recently begun to trend positively. Shares are now up 8% over the last 3 months and nearly 9% in the last 30 days. During earnings season however, the stock tends to remain relatively flat. Clearly the biggest news from Pfizer this quarter has been the scrapped deal with Allergan. The deal which was valued at over $150 billion was intended to give Pfizer a home in tax friendly Ireland but also expand its already extensive pipeline of branded products. Despite the flopped deal, Pfizer should be just fine moving forward. The company has aggressively cut costs, expanded its pipeline and signed new licensing deals to meet or beat expectations. Within its current product suite, Lyrica has seen the most robust growth with no signs of waning. Meanwhile, Pfizer has a deep pipeline of products pending FDA approval or on the verge of hitting the market. Last quarter, the company reported 30 phase III projects to meet the needs of various conditions.
Due to the nature of pharmaceuticals, Pfizer is constantly facing threats from all sides. Genericization and currency headwinds continue to pose a risk to top line growth. Pfizer expects both of these issues to impact revenue by nearly $5 billion in fiscal 2016. Genericization has lost the company exclusive rights to key products including Liptor and Zoloft. Any pipeline setbacks would be a huge blow moving forward. That said, the most important thing to watch this Tuesday will be future guidance, and any mention of the impact of the failed Allergan deal.
Do you think PFE can beat estimates? There is still time to get your estimate in here!