Will Pfizer Earnings Move the Dow?

With hundreds of companies having reported quarterly results, we're now in the heart of earnings season. The key to making smart investment decisions with stocks releasing their quarterly reports is to anticipate how they'll do before they announce results, leaving you fully prepared to respond quickly to whatever inevitable surprises arise. That way, you'll be less likely to make an uninformed, knee-jerk decision.

Let's turn to Pfizer (NYSE: PFE  ) . With its gain of more than 20% in 2012, Pfizer managed to crush the performance of the Dow Jones Industrial Average (DJINDICES: ^DJI  ) and defy skeptics who thought patent expirations would destroy the company. Let's take an early look at what's been happening with Pfizer's over the past quarter and what we're likely to see in its quarterly report on Tuesday.

Stats on Pfizer

Analyst EPS Estimate

$0.44

Change From Year-Ago EPS

(12%)

Revenue Estimate

$14.4 billion

Change From Year-Ago Revenue

(14%)

Earnings Beats in Past 4 Quarters

3

Source: Yahoo Finance.

Will Pfizer's earnings relieve investors' worries?
Pfizer has had analysts second-guessing its future for a while now, as they've reined in their earnings estimates by a nickel per share in the past three months. But the stock hasn't been vulnerable to those concerns, having risen more than 6% since late October.

The big issue that continues to plague Pfizer's results is the loss of its Lipitor and Viagra patents, which is why sales are expected to fall so much in the fourth-quarter report. The bad year-over-year comparisons are seen continuing in the current quarter as well, but then the company should get some relief, as it expects sales to bottom out and drop only about 1% in 2013.

The big piece of news for Pfizer came late in the quarter, when the FDA in late December approved Eliquis, the blood clot medication the company developed in partnership with Bristol-Myers Squibb (NYSE: BMY  ) . The key now will be how well Pfizer and Bristol can get the drug to market, but analysts think it could become a multibillion-dollar blockbuster once it hits its stride.

One interesting future move to look into is Pfizer's planned IPO of its Zoetis animal health segment. Unlike the decision Abbott Labs made in separating into two companies and spinning off its pharmaceutical business into AbbVie (NYSE: ABBV  ) , Pfizer expects to hang onto the vast majority of Zoetis shares, providing only about a 20% public float. That means Pfizer shareholders will continue to benefit from any favorable results Zoetis provides going forward.

As you can see, Pfizer has a lot to look forward to in its future. On Tuesday, it'll be far more important to see what its prospects are for the many projects it has in its pipeline than to focus too much on what may, on the surface, look like disappointing numbers.

Is AbbVie the better buy?
Pfizer investors should worry about the newly created AbbVie. Formerly Abbott's branded-pharmaceuticals business, the company distributed shares to investors on Jan. 2. The Fool has created a brand-new premium report to help you understand AbbVie and its competitive position within the pharmaceutical industry. Be sure to claim this report by clicking here now.

Click here to add Pfizer to My Watchlist, which can find all of our Foolish analysis on it and all your other stocks.


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