Pharmaceutical giant Pfizer (PFE -0.54%)reported third-quarter financials on Tuesday, Oct. 29, that showcased robust performance on top and bottom lines. Revenue of $17.7 billion was up 32% increase year over year and adjusted EPS of $1.06 was up 58%. The EPS total came in 72% ahead of analysts' consensus estimates.
With substantial contributions from its oncology products and ongoing demand for COVID-19 vaccines, Pfizer's Q3 results display a strong showing despite ongoing industry challenges.
| Metric | Q3 2024 | Analyst Estimate | Q3 2023 | Change (YOY) |
|---|---|---|---|---|
| Adjusted EPS | $1.06 | $0.61 | $0.67 | 58.2% |
| Revenue | $17.7 billion | $14.92 billion | $13.5 billion | 32% |
| Oncology segment revenue | $11.5 billion | N/A | $9.3 billion | 25% |
Source: Pfizer. Note: Analyst consensus estimates for the quarter are provided by FactSet. YOY = Year over year.
Understanding Pfizer's Business
Pfizer is a global pharmaceutical giant that develops and manufactures healthcare products including vaccines, medicines, and consumer healthcare products. Traditionally known for its strength in infectious diseases, the company has expanded into oncology, inflammation, and immunology.
Recently, Pfizer has concentrated on strengthening its R&D pipeline and acquisitions to bolster its oncology segment. It emphasizes innovative capabilities by creating a dedicated Oncology Research and Development team and leveraging strategic business acquisitions, like that of Seagen, to fuel future growth.
Quarterly Highlights
During the third quarter, Pfizer's financial performance was marked by significant achievements in its oncology and COVID-19 segments. The oncology division alone generated $11.5 billion in Q3 revenue, contributing to the company's overarching growth strategy. Products like Padcev, Xtandi, and Comirnaty were key performers.
This period also saw reductions in operational expenses. Notably, the cost of sales decreased by 43% compared to Q3 2023 due to prior-year inventory write-offs, while R&D expenses saw a slight 4% drop, indicating efficient cost management. Additionally, the acquisition of Seagen, crucial for oncology revenue, brought in $854 million globally.
The quarter faced challenges, including patent expirations affecting revenue potential and pricing pressures due to regulatory changes. Despite these hurdles, Pfizer's strategy to protect its intellectual property through lawsuits and settlements showed promise.
The company’s updated COVID-19 vaccine booked $1.42 billion in Q3 revenue, up 9% from the same period a year ago. Anti-viral COVID-19 medication Paxlovid brought in $2.7 billion in Q3 sales, up from the $202 million it posted in Q3 2023.
Looking Ahead
Looking forward, Pfizer's management increased its annual revenue guidance to $61 billion to $64 billion, up from a previous revenue forecast of between $59.5 billion and $62.5 billion, displaying confidence in its operational capabilities and market demand. It raised full-year 2024 adjusted EPS guidance to a range of $2.75 to $2.95.
Management stressed the importance of local market adaptation, especially in emerging regions, to capture growth opportunities. As Pfizer continues to face patent expirations, investor focus will be on its efforts to minimize the impacts and sustain momentum in newly developed and acquired product lines.
