The Q3 Earnings Season – Pfizer

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By: Ahura Chalki

Pfizer, the largest pharmaceutical company in the world (rankingthebrands.com), founded in 1849. The company shares, are listed on the NYSE and component of Dow Jones Industrial Average (2004) as well. This American multinational pharmaceutical corporation, which is based in New York City and “GlaxoSmithKline” on Wednesday 19, December 2018, announced a merger of their consumer healthcare units that produce over-the-counter medicines.

Pfizer, Inc. PFE (NYSE), will report the Q3 earnings results for 2019, on October 29, before the US market opens. Before going to Q3 data estimated, will remain some more data from the company and its products to have a better understanding of estimated numbers.

After a small beginning, the company became larger every year and now they are the word’s number one of selling drugs, since they have a wide variety of products, which you can find in any pharmacy, and probably you had used at least one of them. Most know products are including pneumonia vaccine Prevnar, Lyrica, Dimetapp, Xanax and Viagra, which treats erectile dysfunction. However, as we can see in Company documents and the report of “axios.com”, “Over the past 4 years, the product that generated the most sales for Pfizer wasn’t one of its household names, like Lyrica, Lipitor or Viagra. It was Prevnar 13, a vaccine that protects against pneumonia and other infections.” Check the bellow chart, please.

Previous quarters overview:

So far, Pfizer’s shares have declined 15.78% YTD, based on Zacks data, compared with a decline of 0.3% for the industry. (Check the bellow chart from Zacks)

The following information and data about the first and second quarter of 2019 has been taken from the company report. (investors.pfizer.com)

During first-quarter 2019, Pfizer returned $10.9 billion directly to shareholders, through a combination of:

  • $2.0 billion of dividends, or $0.36 per share of common stock
  • $8.9 billion of share repurchases, composed of $2.1 billion of open-market share repurchases and a $6.8 billion accelerated share repurchase agreement executed in February 2019.
  • As of April 30, 2019, Pfizer’s remaining share repurchase authorization was $5.3 billion.

Second-Quarter 2019 Revenues of $13.3 Billion, Reflecting 2% Operational Growth Driven by 6% Operational Growth from Pfizer Biopharmaceuticals Group

Second-Quarter 2019 Reported Diluted EPS of $0.89, Adjusted Diluted EPS of $0.80

Updated 2019 Financial Guidance Primarily to Reflect the Anticipated August 1, 2019 Formation of the Consumer Healthcare Joint Venture with GlaxoSmithKline plc and the Anticipated Near-Term Completion of the Array BioPharma Inc. Acquisition

Announces Reverse Morris Trust Transaction to Combine Upjohn and Mylan, Creating a New Global Pharmaceutical Company

The Zacks Consensus Estimate for Q3 is:

  • Earnings ESP is -0.79%. The Zacks Consensus Estimate stands at 63 cents per share.
  • Sales of Ibrance (worldwide) and alliance revenues from Eliquis is $1.21 billion and $1.01 billion, respectively.
  • Prevnar 13/Prevenar 13 and Enbrel declined in the second quarter. It remains to be seen if sales of these drugs have improved this time around.
  • Sales of Enbrel and Prevnar is $469 million and $1.59 billion, respectively.
  • Viagra sales are likely to have declined due to generic competition that began in December 2017.
  • Sales of Xeljanz is $564 million

Meanwhile, due to some unfavourable revisions in Advisory Committee on Immunization Practices’ (ACIP) pneumococcal vaccination guidelines for Prevnar 13 in adults across the United States, Pfizer, had said that it expects some decline in demand for Prevnar, which could weaken sales in the future quarters.      

Technical overview:

S1

S2

S3

R1

R2

R3

34.00

31.52

28.92

38.75

41.71

43.77

 

Currently, the stock price has moved almost to its 23.6% Fibonacci, falling from its HH in $46.44 (December 2018) to its 18 months low at $34.00 (Aug. 2019). Technically, it is in a downtrend in the higher timeframes, moving under EMA50 as well as EMA20. However, in the H1 and H4 chart, candles are clearly forming above EMA20 and 50 with the confirmation of the bullish trend from EMA crossing strategy. Key levels, for now, provide support and resistance levels, which one by one will be in focus, depending on positive or negative earnings reports. However, since August and its LL, it could hardly reach it’s 23.6% Fibo once, and now it is trading under this level, testing the 38.2% fibo would be the next resistance levels. A pullback from these fib levels and a break of S1 at $34.00, will put the trend back in its bearish way to test its 26 months low at $31.52 and S3 at $28.92.


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