Drug major Pfizer is scheduled to release its fourth quarter earnings on Tuesday, January 31. All-time best-selling drug, Lipitor's patent expired in November last year but a deal with Watson Pharmaceuticals to sell an authorized version of the drug should help fuel top line growth after Watson reported strong Q4 sales.
Analysts expect Pfizer to report earnings of $0.47 per share – flat year-over-year, with estimates ranging from $0.43 to $0.50. Wall Street's consensus revenue estimate for the quarter is $16.57 billion – a decline of 5+ percent.
Among the company's product portfolio, Lipitor sales are expected to be hit the hardest after losing patent exclusivity and will drop more than 30 percent. Furthermore other drugs like Xalatan, Aromasin, Caduet, Aricept and Vfend will also see sales drops due to generic competition. Sales of Chantix and Lyrica are expected to show good year-over-year improvements.
Third Quarter Results & Earnings History
Revenue increased in the third quarter breaking a run of two consecutive quarters of missing estimates and rising 6.3 percent to $17.2 billion.
Profits have risen for 3 consecutive quarters in 2011 rising 14.8 percent in 3Q. EPS grew 9.7 percent in the first quarter and 5.5 percent in the second.
Standpoint Research downgraded PFE from Buy to Hold in November. Leerink Swann downgraded the stock in the same month from Outperform to Market Perform.
14 analysts maintain a Buy rating, 4 analysts have a Overweight rating, and 5 analysts a Hold rating on the stock.
Pfizer is expected to face continued pressures from patents expiration but an emerging pipeline should help the company stave off competition. Due to these patents expiration, we expect to see more M&A activity in the industry as major companies look to pick up smaller business and expand their pipelines.
Following a restricting of the company's cost base, it has been able to enhance its earnings stability. Expansion and further pipeline development will be a key going into 2012. Investors will be expecting commentary on the planned sale or spin-off of its Animal Health and Nutritional businesses.
Other positive catalysts are Prevnar-13-valent vaccine and Inlyta for renal cell carcinoma which have a high probability of FDA approval this quarter.