Pfizer (PFE) reported an unexpected fourth-quarter profit on Tuesday after the US government returned fewer doses of the pharmaceutical giant’s COVID-19 oral antiviral pill, Paxlovid, than previously expected.
The company posted adjusted earnings of $0.10 a share for the December quarter, plummeting from $1.14 the year before. The consensus on Capital IQ was for a loss of $0.18. Revenue tumbled 41% to $14.25 billion, falling short of the Street’s view for $14.4 billion.
Revenue from primary care, which includes the company’s Comirnaty COVID-19 vaccine and Paxlovid, slumped 60% to $6.99 billion. Paxlovid global revenue plunged by $5 billion due to a non-cash revenue reversal of $3.5 billion, related to the return of 6.5 million treatment courses from the government. The company estimated in October for a non-cash revenue reversal of $4.2 billion in the fourth quarter from the return of 7.9 million courses of the pill.
Comirnaty global sales tumbled 54% to $5.36 billion mainly because of lower US government contracted deliveries, and lower demand in international markets, according to Pfizer.
The company reported an 11% revenue gain in the specialty care business to $3.95 billion. Oncology sales ticked down 3% to $2.93 billion while the company’s business innovation segment, which it launched in the first quarter of 2023, saw revenue growth of 4%.
“We are pleased with the strong 8% operational revenue growth of Pfizer’s non-COVID products in the fourth quarter of 2023, achieving our full-year 2023 non-COVID operational revenue growth target of 6% to 8%,” Chief Financial Officer David Denton said in a statement. “In addition, we are on track to deliver at least $4 billion in annual net cost savings by the end of 2024 from our cost realignment program.”
The pharmaceutical giant reiterated the full-year 2024 outlook it provided in December for adjusted EPS of $2.05 to $2.25 and revenue of $58.5 billion to $61.5 billion. The Street is looking for normalized earnings of $2.22 per share on revenue of $60.49 billion. In 2023, the company’s adjusted EPS and revenue sank 72% and 42%, respectively.
Pfizer continues to expect a roughly combined $8 billion in revenue from Comirnaty and Paxlovid for the current year, as well as about $3.1 billion from cancer drugmaker Seagen, which it acquired last month. “We are prepared to execute our commercial strategy to drive continued growth from our newly launched and acquired products, and to deliver on our targeted cost savings that we expect will expand our operating margins in 2024 and beyond,” according to Denton.