Pfizer stock gains after raising annual earnings outlook

Pfizer (NYSE:PFE) shares gained 4.1% premarket Tuesday after the company topped expectations with its second quarter results and raised its full-year outlook, driven by strength in its oncology portfolio and continued efforts towards realigning its cost base.

The New York-based pharma giant generated adjusted earnings of $0.60 a share on revenue of $13.28B that grew 2.2% year-over-year. However, the Q2 reported diluted EPS was unfavorably impacted by $0.18 resulting from a $1.3B one-time restructuring charge related to the multi-year cost reduction program.

This marked Pfizer’s (PFE) first quarter of topline revenue growth, on a year-over-year basis, since the fourth quarter of 2022 when our COVID revenues peaked. Both metrics topped analysts’ projections for the quarter.

Revenues grew 3% operationally year-over-year despite anticipated decline in revenues from its COVID-19 products, Comirnaty and Paxlovid. Comirnaty vaccine marketed with BIoNTech (BNTX) added $195M in revenue with a ~87% drop while COVID-19 pill Paxlovid generated $251M indicating a ~79% YoY growth.

Excluding contributions from Comirnaty and Paxlovid, revenues grew 14% operationally to $12.8B, amid a strong performance from blood thinner Eliquis, which Pfizer (PFE) markets with Bristol Myers (BMY). Pfizer (PFE) also achieved exceptional growth in its oncology portfolio, with strong revenue contribution from its legacy-Seagen products.

The drugmaker raised its full-year 2024 revenue guidance by $1B at the midpoint to a range of $59.5 to $62.5 billion (consensus estimate: $60.58B) and adj. diluted EPS guidance by $0.30 at the midpoint to $2.45 to $2.65 (consensus estimate: $2.37). Including the contribution from Seagen and excluding revenues from Comirnaty and Paxlovid, the firm now expects to achieve full-year 2024 operational revenue growth of 9% to 11% Y/Y.

“Pfizer has raised its 2024 revenue guidance by $1bn, meaning that, ex-COVID, the company will grow revenues by 9-11% this year. Adjusted EPS guidance for $2.45 – $2.65 has also been raised. Investors may be right to conclude that, after a rocky couple of years post-COVID, which has seen the share price fall by 50%, Pfizer, which has one of the most enviable pipelines in Pharma, is finally ready to begin rewarding shareholders again,” Seeking Alpha analyst Edmund Ingham commented.

The company also said it is on track to deliver at least $4B in net cost savings by the end of 2024 from its previously announced cost realignment program. The one-time costs to achieve the savings associated with the first phase of the program are expected to be ~$1.7B. These costs will be recorded primarily in 2024, with cash outlays expected in 2025 and 2026.