Pfizer's third quarter 2014 earnings of $0.57 per share were a
penny above the Zacks Consensus Estimate but 2% below the year-ago
earnings. Revenues, which declined 2% to $12.4 billion, were above
the Zacks Consensus Estimate of $12.1 billion. Revenues were
impacted by the loss of exclusivity of certain products including
Detrol LA (in the U.S.), the expiry of the Spiriva collaboration in
some countries and the Enbrel agreement. Pfizer tightened its
earnings outlook for 2014 and brought down the higher end of its
revenue guidance to reflect the impact of the genericization of
Celebrex from Dec 2014. Although revenues will remain under
pressure going forward, cost-cutting efforts and share buybacks
should help Pfizer achieve its earnings guidance. We remain Neutral
on the stock.
New York-based Pfizer, Inc. focuses on the development and
commercialization of a wide range of products including human and
animal biologic and small molecule medicines and vaccines, as well
as consumer health care products.
In Oct 2009, Pfizer acquired another large pharma company,
Wyeth, for $68 billion. With this acquisition, Pfizer became a more
diversified biopharma company with a stronger presence in emerging
markets. In Feb 2011, Pfizer acquired King Pharmaceuticals for $3.6
Pfizer conducts its commercial operations through three business
segments while two of these include Innovative business lines, the
third comprises the Value business line. One of the Innovative
segments (Global Innovative Pharmaceutical - GIP) includes products
that have patent protection beyond 2015 while the other focuses on
vaccines, oncology and consumer healthcare (Global Vaccines,
Oncology and Consumer Healthcare segment - VOC).
The Value segment (Global Established Pharmaceutical segment -
GEP) includes products generating strong and consistent cash flow.
Apart from including products that have lost market exclusivity,
mature, patent-protected products that are expected to lose
exclusivity through 2015 in most major markets are also a part of
this segment. Moreover, this segment includes biosimilars and
collaborations for established products like the company's
partnerships with Mylan in Japan, Teuto in Brazil and Hisun in
All three segments reflect the performance of developed as well
as emerging markets. While Pfizer is yet to make a decision, the
possibility of the company splitting its two primary businesses the
R&D driven portfolio (which is managed through the GIP and VOC
segments) and the GEP business remains.
Important products in Pfizer's portfolio include Lyrica (for
several indications including the management of post-herpetic
neuralgia, diabetic peripheral neuropathy and fibromyalgia),
Prevnar (vaccine for the prevention of pneumococcal disease),
Sutent (advanced renal cell carcinoma), and Enbrel (rheumatoid
arthritis, juvenile rheumatoid arthritis, psoriatic arthritis,
plaque psoriasis and ankylosing spondylitis) among others.
In Nov 2012, Pfizer divested its Nutrition business to Nestl for
a cash consideration of $11.85 billion. In Aug 2011, Pfizer sold
its Capsugel unit to Kohlberg Kravis Roberts & Co L.P. for
$2.375 billion in cash. In Jun 2013, Pfizer gave up its stake in
its Animal Health business which was spun off in early 2013 and
started trading on NYSE from Feb 1, 2013 under the name Zoetis.
Pfizer reported worldwide sales of $51.6 billion in 2013 (down
6%). While sales from the Biopharmaceutical segment came in at
$47.9 billion, down 7%, Consumer Healthcare contributed $3.3
billion to 2013 sales, up 4%.
Pfizer Inc. (PFE): Read the Full Research
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