Pfizer's Healthy Quarter Can't Stop the Dow's Slide

So much for the stock market gains that dominated most of today's trading. The Dow Jones Industrial Average (DJINDICES: ^DJI  ) has fallen into the red in the afternoon session, down a modest 22 points as of 2:20 p.m. EDT. Most stocks on the blue-chip index have taken losses as Wall Street eyes the results of the Fed's meeting, set to be released tomorrow. What's impacting your portfolio? Let's dive into today's top stories.

Pfizer and Merck head in different directions
Health care companies Pfizer (NYSE: PFE  ) and Merck (NYSE: MRK  ) kicked things off today by reporting second-quarter results. Pfizer has dominated headlines this week for its organizational shakeup as it looks to transition into a streamlined future centered around its high-growth branded-pharmaceuticals core. That didn't stop the company from laying out a solid earnings beat today, however, which sent shares rising 0.7% to rank among the Dow's leaders.

Pfizer reported adjusted earnings per share of $0.56, beating bottom-line earnings estimates. However, the company's sales fell by more than 7% as generic competition for cholesterol-fighting drug Lipitor, which lost patent exclusivity last year, ate away at the drug's revenue. Despite the drop, Pfizer maintained its full-year outlook, and the firm has a number of promising drugs both in the pipeline and recently launched onto the market that should help replace Lipitor's lost sales.

The optimism is in short supply over at Merck. Although Pfizer's rival beat projections with adjusted EPS of $0.84 for the quarter, revenue plunged 11%. It wasn't just generic competition that hurt Merck this quarter, either: The company's star diabetes medication, Januvia, was stung by the dollar's strength, which weakened overseas sales. Januvia picked up just 1% growth for the quarter, although said growth would have come in at 7% if not for the currency issues.

Januvia is Merck's bread and butter, having brought in more than $5 billion in sales last year, but the drug will need to keep growing as Merck loses sales from former top blockbuster asthma drug Singulair. Merck has some promise in its drug pipeline, but the company will need to step it up if it wants to keep pace with Pfizer and other top dogs in the pharmaceutical industry. Today's muted report pulled down Merck's shares by 0.5%, even as the company reiterated its full-year outlook.

Merck is hardly today's biggest loser, however. Verizon (NYSE: VZ  ) leads the Dow's laggards, falling by more than 2%. Verizon recently expressed interest in entering the Canadian market, toying with the idea of purchasing Canada's Wind Mobile back in June. The Canadians may not love the idea, though: The country's recently appointed industry minister, James Moore, is under heat from domestic wireless firms and industry sources to hold back potential subsidies that would ease the entry of Verizon and other international carriers.

Rumors that Verizon and other big telecoms are seeking to enter Canada have sent share prices at the country's wireless companies plunging. Canadian firm Telus was blocked by the government from purchasing rival domestic company Mobilicity, a firm that Verizon is also considering buying.

Verizon has performed well this year, stretching its lead over rivals as America's No. 1 wireless carrier. But is that enough to make it your portfolio's need-to-have stock? The Motley Fool's chief investment officer has selected his No. 1 stock for this year. Find out which stock it is in the special free report: "The Motley Fool's Top Stock for 2013." Just click here to access the report and find out the name of this under-the-radar company.

Read/Post Comments (0) | Recommend This Article (2)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Compare Brokers

Fool Disclosure

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2567400, ~/Articles/ArticleHandler.aspx, 9/24/2016 8:46:17 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated 23 hours ago Sponsored by:
DOW 18,261.45 -131.01 -0.71%
S&P 500 2,164.69 -12.49 -0.57%
NASD 5,305.75 -33.78 -0.63%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

9/23/2016 4:55 PM
^DJI $18261.45 Down -131.01 -0.71%
MRK $62.96 Down -0.06 -0.10%
Merck and Co. CAPS Rating: ****
PFE $34.26 Up +0.11 +0.32%
Pfizer CAPS Rating: ****
VZ $52.56 Up +0.21 +0.40%
Verizon Communicat… CAPS Rating: ****