Pfizer results blow past analyst expectations boosted by new drug sales
Pfizer reported first-quarter results that blew past analyst estimates, boosted by sales of its new cancer and arthritis treatments and the acquisition last year of hospital products company Hospira.
The largest U.S. drugmaker also raised its revenue and earnings forecast for the year, helped in part by the weakening dollar. Shares of the company were up 2.5 percent at $33.62 in premarket trading on Tuesday.
Global company sales jumped 20 percent to $13 billion, which was $1 billion more than Wall Street had expected. But the quarter included five more days of sales in the United States than the year-ago quarter, adding revenue of $900 million in the most recent period. Pfizer said sales would be hurt in the fourth quarter of 2016, however, when those added days will be offset by fewer days.
Credit Suisse analyst Vamil Divan said the results were impressive, with most drug categories beating sales expectations. But he said investors are eager to hear how Pfizer's overall strategy might change, following the company's decision last month to abandon its planned $160 billion acquisition of Allergan Inc.
Pfizer walked away after the U.S. Treasury issued new rules curbing tax inversion deals, under which American companies move overseas to cut taxes.
Many analysts believe Pfizer needs to buy new medicines or entire biotech companies to ensure competitive earnings growth. Meanwhile, its recently launched breast cancer treatment, Ibrance, is on its way to becoming a mega-blockbuster product.
With the Allergan deal now scratched, Pfizer has said it will decide this year whether to split off its hundreds of generic medicines, called established products, into a separate business. When it announced its planned Allergan deal last November, Pfizer put off making the decision until 2019.
Sales of the generic medicines rose 17 percent in the quarter to $5.97 billion, while sales of its array of patent-protected drugs jumped 23 percent to $7.03 billion.
Net income rose to $3.02 billion, or 49 cents per share, from $2.38 billion, or 38 cents per share, a year earlier, according to Thomson Reuters I/B/E/S.
Excluding special items, Pfizer earned 67 cents per share, well above the average analyst estimate of 55 cents per share.
Pfizer now expects 2016 revenue of $51 billion to $53 billion, from its earlier view of $49 billion to $51 billion, and earnings of $2.38 to $2.48 per share, from $2.20 to $2.30 per share.