While the stock market roared in 2017, Pfizer (NYSE:PFE) turned in a respectable, but not spectacular, performance, with its stock gaining 11.5%. The big pharma company's third-quarter results, announced in October, highlighted why -- slow operational sales growth but solid earnings increases.

Pfizer provides an update on its fourth-quarter financial performance on Jan. 30 before the market opens. Will there be a continuation of the mixed results seen in the third quarter, or could the drugmaker deliver a surprise? Here's what to expect in Pfizer's Q4 earnings results.

Magnifying glass on top of financial report

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There's no reason to think that Pfizer's fast-growing drugs didn't keep their solid momentum going during the fourth quarter. Ibrance generated sales of $878 million in the third quarter, up 59% year over year. Total revenue in the ballpark of $900 million in the fourth quarter should be attainable, despite the presence of two other CDK4/6 inhibitors in the market.

Eliquis will no doubt continue its winning ways as well. Pfizer reported in the third quarter that its portion of sales for the anticoagulant jumped 43% year over year to $644 million. The company's partner, Bristol-Myers Squibb, recorded third-quarter sales for Eliquis of $1.2 billion. Both companies should have another great quarter for the drug. My view is that Pfizer should report around $680 million in revenue from Eliquis on Tuesday.

Pfizer CEO Ian Read said in October that Xeljanz was setting all-time highs with respect to new rheumatology prescriptions. That showed up in the drug's third-quarter sales, which soared 48% to $348 million. Pfizer received good news from the FDA in December with approval for Xeljanz in treating psoriatic arthritis. While the new indication came too late in the year to make much difference in the fourth quarter, Xeljanz should still do very well -- with sales probably around $360 million.

Several other drugs should also be bright spots in Pfizer's fourth-quarter results. I'd definitely put smoking-cessation product Chantix and nerve-pain drug Lyrica in that group. 


Now for the not-so-bright spots. Pfizer's sterile injectables business dragged overall growth down in previous quarters. Expect more of the same in the fourth quarter.

Product shortages resulting primarily from supply-chain issues have hurt sales of sterile injectables for a while now. Although Pfizer has stated that it's working to resolve these problems, there's little reason to hope for significant improvement in the fourth quarter. Supply challenges are likely to carry over into 2018.

Declining sales for certain legacy products will also continue to plague the big drugmaker. In addition, Pfizer has a laundry list of drugs in the "peri-LOE" category, which refers to drugs that have either recently lost exclusivity or soon will do so. Overall sales for these drugs have been falling and will probably continue to do so in the fourth quarter.

Unfortunately, Pfizer's woes aren't limited to only drugs that have either lost exclusivity in the past or fall into the peri-LOE group. Sales for Enbrel fell nearly 13% year over year in the third quarter. Expect more headwinds for the autoimmune-disease drug in the fourth quarter because of biosimilar competition in Europe.

In between

Pfizer should also report fourth-quarter results in several areas that are neither overwhelmingly positive or negative. I'd put Xtandi on that list. Although prescription growth for the prostate cancer drug picked up with the 2016 acquisition of Medivation is solid, revenue isn't yet where Pfizer would like it to be. One reason is that there has been high utilization of patient assistance programs. Over time, Xtandi should be a big winner for Pfizer, but I wouldn't count on a radical improvement in the fourth quarter.

Another drug gained through an acquisition in 2016 is Eucrisa. Pfizer expected the eczema drug to have blockbuster potential when it bought Anacor Pharmaceuticals. Eucrisa won FDA approval in December 2016, but sales didn't exactly take off in the first three quarters of last year. Pfizer has made progress addressing some of the payer-related issues that held back sales, though. My expectation is that momentum will pick up for Eucrisa, but probably not enough in the fourth quarter to make a huge difference on Pfizer's financial performance.

Then there's Pfizer's biosimilar program. The good news is that biosimilar revenue is growing. The bad news is that it's not growing as much as Pfizer wants it to. I don't see either story changing in the fourth quarter. Pfizer's primary challenge comes from Johnson & Johnson (NYSE:JNJ), which has defended Remicade from Pfizer's Inflectra biosimilar pretty well. Although Pfizer has taken J&J to court, the ongoing litigation won't have an impact for Inflectra yet.


So what's the overall predicted verdict for Pfizer's fourth quarter? My take is that there could be a repeat of the third quarter -- low-single-digit percentage revenue growth accompanied by good earnings growth.

However, I think there are two things that will be discussed in Pfizer's fourth-quarter earnings call that could generate plenty of excitement. One is the potential sale or spin-off of its consumer healthcare business. I viewed that as potentially great news for shareholders when Pfizer announced that it was considering these options in October. Although J&J has publicly stated that it won't buy Pfizer's consumer unit, several other companies are reportedly in the running. 

Probably the best news from Pfizer, though, will relate to U.S. tax reform. AbbVie just bumped up its 2018 earnings outlook as a result of the impact of tax reform. Pfizer should also enjoy nice benefits from both lower corporate tax rates and repatriation of offshore cash at a lower rate. While this might not affect the fourth-quarter results, it could bode well for Pfizer in 2018.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.