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What Really Mattered With Pfizer's Q2 Results

By Keith Speights and Brian Orelli, PhD – Aug 5, 2021 at 8:31AM

Key Points

  • Pfizer posted strong revenue growth in Q2 thanks in large part to sales of its COVID-19 vaccine.
  • The company's increased guidance was the big story in its Q2 update.

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It's more about what's on the way than what happened in the second quarter.

Pfizer (PFE -0.16%) recently provided its second-quarter update. Investors were pleased with the big drugmaker's strong performance. In this Motley Fool Live video recorded on July 28, Motley Fool contributors Keith Speights and Brian Orelli discuss what really mattered in Pfizer's Q2 results.

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Keith Speights: Well in our last few minutes Brian, let's touch on the big earnings story from this morning and it has to do with Pfizer. What can you tell us about Pfizer's earnings and what should investors really be watching here?

Brian Orelli: Yeah, it was a pretty solid quarter from Pfizer and it's up 2.5% this morning, it had 86% operational revenue growth that excludes currency changes. Obviously most of that was from the COVID-19 vaccine. But even if you back that out, operational revenue growth was still up 10%.

They increased revenue guidance, they're now looking for $78-$80 billion in revenue this year. They also increased adjusted earnings guidance and they're now expecting $3.95-$4.05 per share for the adjusted guidance. Some of that increase was from the vaccine. They've gotten new contracts that they expect to complete this year. They now expect to deliver 2.1 billion doses this year, which will raise $33.5 billion in revenue.

But they also raised revenue guidance for the rest of the drugs that Pfizer sells by 400 million and adjusted earnings by $0.5 per share for the rest of the other drugs. Pfizer seems to be doing quite well not only with their COVID-19 vaccine but with the rest of the drugs that they sell as well.

Speights: Yeah. This is not unexpected, I don't think. Pfizer did spin off its Upjohn units back in November, I think it was. Upjohn had some of the older drugs that were losing sales because they lost exclusivity and really served as drag on Pfizer.

Well, Pfizer doesn't have Upjohn anymore. Now we're seeing its core products grow. Then of course, we're seeing just booming sales for its vaccine. I was looking to see what Pfizer's previous revenue guidance for the year was. Previously the company was calling for revenue between $70.5 and $72.5 billion. So bumping that up to $78-$80 billion, that's a pretty hefty revenue guidance hike.

Orelli: Yeah. Obviously, most of that was from the COVID-19 vaccine, but as I said, 400 million of it was from the rest of the drugs performing better than Pfizer had previously expected. So that's not too bad.

Speights: You mentioned Pfizer stock's up around 2.5% so far this morning. I that a fair level for the stock to move on this news from its Q2 update?

Orelli: I think Pfizer's stock has not performed nearly as well as Pfizer's revenue in earnings. I think that's probably partially because investors are concerned about how long the COVID-19 vaccine revenue is going to continue to come into play, which is [laughs] the complete opposite of Moderna (MRNA -1.27%) which seems to just keep going up and up and up as it sells more of its vaccine.

That surprises me a little bit because Moderna is obviously way more dependent on its vaccine than Pfizer is on its vaccine. It surprises me a little bit that Pfizer hasn't performed as well. It hasn't even performed as well as the S&P 500 last time I looked for year to date, the last year or so.

Keith Speights owns shares of Pfizer. The Motley Fool recommends Moderna Inc. The Motley Fool has a disclosure policy.

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Stocks Mentioned

Pfizer Stock Quote
Pfizer
PFE
$49.49 (-0.16%) $0.08
Moderna Inc. Stock Quote
Moderna Inc.
MRNA
$173.15 (-1.27%) $-2.23

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