When Pfizer reports its second-quarter results on Tuesday, the focus will be on assessing the effectiveness of the company’s turnaround strategies. In 2023, Pfizer’s shares faced a dramatic decline of about 40% due to a significant drop in demand for its Covid-19 products. This drop in demand led to a major shortfall in performance compared to the company’s initial guidance, casting a shadow over its financial health. However, the outlook for 2024 shows signs of improvement, with Pfizer’s stock up approximately 6% year-to-date, although it still trails behind the broader S&P 500 Index. Despite this, recent trends indicate a more positive trajectory, with the stock having gained around 20% since May, outpacing the S&P 500’s increase of under 10% in the same period.
The upcoming financial report is critical for Pfizer as it will reveal whether the company can sustain this upward momentum. Analysts expect Pfizer to report second-quarter revenues of $13 billion, marking a modest increase from $12.7 billion reported in the same quarter last year. Earnings per share (EPS) for the quarter are projected to be $0.46. For the full fiscal year of 2024, Pfizer has guided earnings to fall between $2.15 and $2.35 per share, with revenues expected to be between $58.5 billion and $61.5 billion. These projections align closely with consensus estimates, which anticipate earnings of $2.36 per share and total sales of $60.7 billion for the year.
Pfizer is also engaged in two major cost-cutting initiatives aimed at improving its financial stability. The company has announced a new cost-saving program focused on reducing its cost of goods sold, which is expected to generate $1.5 billion in savings by the end of 2027. However, this program will involve $1.7 billion in one-time costs, which will largely impact the 2024 fiscal year.
In addition to financial restructuring, Pfizer’s strategic initiatives in drug development are noteworthy. The company is advancing its efforts to develop a once-daily formulation of danuglipron, a weight-loss medication. This move follows the discontinuation of a twice-daily version of danuglipron late last year due to adverse side effects. As competitors like Eli Lilly and Novo Nordisk dominate the weight-loss drug market with their GLP-1 injections, Pfizer’s entry into this space with a new formulation is seen as a crucial, though potentially late, attempt to capture market share.
Moreover, Pfizer’s efforts to address respiratory syncytial virus (RSV) are also in focus. The company is preparing for the second annual launch of its RSV vaccine, Abrysvo. This year’s launch comes with a revised recommendation from the Centers for Disease Control and Prevention (CDC), which could affect the vaccine’s market potential. Investors will be closely watching Pfizer’s investor call on Tuesday for updates on the upcoming fall launch and the implications of the CDC’s updated guidance on the vaccine’s market prospects.
Overall, Pfizer’s second-quarter results will offer vital insights into the company’s ability to navigate its ongoing challenges and implement its turnaround strategies effectively. The results will be closely analyzed to determine the future trajectory of Pfizer’s performance and its potential for sustained recovery and growth.