Earnings preview: A look at key factors affecting Pfizer’s Q2 results

Pfizer Inc. (NYSE: PFE) is scheduled to report second quarter 2019 earnings results on Tuesday, July 30, before market open. Analysts expect the company to report earnings of $0.75 per share on revenue of $13.4 billion. The company has consistently topped earnings estimates over the past four quarters.

Pfizer’s topline results in the second quarter are expected to be driven by growth in its key brands Ibrance, Xeljanz, Prevnar and Chantix. The company’s products are seeing strong growth in international and emerging markets while performance in the domestic market continues to be plagued by slowdown in volumes and pricing challenges. Negative impacts from foreign exchange could also affect the quarterly numbers.

Pfizer continues to tackle competitive headwinds in biosimilars and generics. However, the company has received a number of new approvals for its products such as Ruxience and Zirabev in the treatment of cancer. Pfizer also expanded Xeljanz into the treatments for psoriatic arthritis and ulcerative colitis. These are likely to be positives and updates on this area will be interesting.

In June, Pfizer announced its decision to acquire Array BioPharma Inc. (NASDAQ: ARRY) for approx. $11.4 billion. The deal is expected to close in the second half of 2019 and be dilutive to Pfizer’s adjusted EPS by $0.04-0.05 in both 2019 and 2020, neutral in 2021, and accretive beginning in 2022, with additional accretion and growth anticipated thereafter. 

At the beginning of this month, Pfizer completed its acquisition of private biotechnology company Therachon Holding AG for $340 million with additional milestone payments related to the TA-46 product. The acquisition is not expected to impact 2019 guidance. Updates on these two acquisitions will also be worth watching.

In the first quarter of 2019, Pfizer beat market estimates with revenues growing 2% to $13.1 billion and adjusted EPS rising 13% to $0.85. The Biopharma segment reported sales growth while the Upjohn and Consumer Healthcare segments posted declines. Sales in the US fell 2% while international sales grew 5%.

For the full year of 2019, Pfizer has guided for EPS to come in the range of $2.83-2.93. Over the past three months, Pfizer’s shares have gained over 6%. The stock was up 1% in afternoon hours on Friday.

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