Categories Analysis, Health Care
Pfizer (PFE): Declines in COVID-19 products expected to drag down overall revenue in 2023
Adjusted EPS for the year is expected to be $3.25-3.45
Shares of Pfizer Inc. (NYSE: PFE) were down on Tuesday despite the company delivering better-than-expected results for the first quarter of 2023. The stock has dropped 24% year-to-date. The company expects revenues in 2023 to be lower than the previous year due to anticipated declines in COVID-19 products.
Quarterly performance
Pfizer’s revenues decreased 29% year-over-year to $18.3 billion in Q1 2023, mainly due to a drop in Comirnaty revenues worldwide. Revenues declined 26% on an operational basis. Excluding the contributions from its COVID-19 products, overall revenues grew 5% operationally.
GAAP EPS was $0.97, down 29% YoY while adjusted EPS decreased 24% to $1.23. Despite the YoY declines, both the top and bottom line numbers surpassed expectations.
COVID-19 products
In Q1 2023, revenues from Pfizer’s COVID-19 products Comirnaty and Paxlovid were $7.1 billion. Comirnaty revenues were down 75% operationally from last year, mainly due to lower contracted deliveries and demand in international markets.
Paxlovid revenues increased, helped by the favorable timing of a final delivery related to the US government contract, along with strong demand in China, and launches in certain international markets.
For fiscal year 2023, Pfizer expects Comirnaty revenues of approx. $13.5 billion, down 64% YoY and Paxlovid revenues of approx. $8 billion, down 58% YoY. This guidance is no longer based on expected deliveries under supply contracts but includes anticipated sales through traditional commercial markets in the US in the latter half of the year.
Seagen acquisition
Pfizer has entered into an agreement to acquire Seagen, a biotechnology company that develops oncology medicines. The addition of Seagen’s antibody-drug conjugate (ADC) technology to its portfolio is expected to increase Pfizer’s capabilities in oncology significantly. Pfizer expects this acquisition could contribute over $10 billion in risk-adjusted revenues in 2030, with significant growth potential ahead.
Outlook
For FY2023, Pfizer expects total revenues to decline 29-33% YoY to $67-71 billion, due to expected revenue declines for its COVID-19 products. The company expects sales contributions from its COVID products to be significantly lower in the second quarter versus the first quarter. Excluding the COVID-19 products, revenues are expected to be up 7-9% operationally. Adjusted EPS for the year is expected to decline 48-51% YoY to a range of $3.25-3.45.
Most Popular
Johnson & Johnson to report Q2 earnings on July 16. Here’s what to expect
Johnson & Johnson's (NYSE: JNJ) business strategy for fiscal 2025 is focused on reducing the impact of patent expirations on its revenue. Anticipating sales to benefit from growth initiatives, including
What to expect when United Airlines (UAL) reports its Q2 2025 earnings results
Shares of United Airlines Holdings, Inc. (NASDAQ: UAL) stayed green on Tuesday. The stock has gained 44% over the past three months. The airline company is scheduled to report its
Earnings Preview: Fastenal Company likely to report higher Q2 sales and profit
Fastenal Company (NASDAQ: FAST), a leading provider of industrial and construction supplies, is set to publish its second-quarter results next week. The company is among the hardest hit by the