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Pfizer Beats Falling Profit as the Dow Bounces Back From Recent Losses

By Dan Carroll – Jan 28, 2014 at 2:30PM

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DuPont falls to the bottom of the Dow despite a solid earnings report, but the blue-chip index rises behind Pfizer and climbing consumer confidence

Although we don't believe in timing the market or panicking over daily movements, we do like to keep an eye on market changes -- just in case they're material to our investing thesis.

The market's recent losses have petered out today, with the Dow Jones Industrial Average (^DJI 0.45%) gaining 88 points as of 2:30 p.m. EST. The Dow piggybacked on a Conference Board report that showed consumer confidence rose more than three points this month, to 80.7. That optimism helped fuel gains across most blue-chip stocks on the Dow. However, no stock's having quite a day like Pfizer (PFE 0.74%), which is up more than 3% behind an optimistic look toward the new year. Let's catch up on what you need to know.

Pfizer's earnings fall, but outlook soars
Pfizer has struggled with the patent cliff lately as its former best-selling cholesterol-fighting drug Lipitor lost patent protection in 2012. That's taken down Pfizer's sales over the past year, including a more than 2% slide in the company's most recent quarter -- although the strengthening dollar hurt Pfizer on currency-related impacts. Pfizer's recent trend of divesting noncritical business units also affected the company's overall performance, as net profit fell 59% for the quarter relative to a major one-time earnings bounce in the year-ago quarter from the sale of its infant nutrition business.

Still, analysts had expected less out of Pfizer, so the earnings beat combined with a solid look ahead has propelled the stock's gain today. Pfizer projects revenue of between $49.2 billion and $51.2 billion in 2014, a range that looks favorable compared to the average analyst estimate of $49.5 billion, as polled by Bloomberg.

Pfizer's strong drug pipeline has impressed analysts in the past, and the company will need to rely on its up-and-coming products as the patent cliff's effects, particularly from the Lipitor loss, begin to wane. Recently approved rheumatoid arthritis drug Xeljanz continues to sell slowly despite once garnering annual peak sales estimates of about $3 billion. Pfizer will need more from the drug and from fellow  potential blockbuster Eliquis.

Earnings season's a fickle thing on the Dow Jones. While Pfizer's stock has made the most of it today, the same can't be said for DuPont (DD). The chemicals giant has fallen to the bottom of the Dow today in losing nearly 1% after it reported adjusted fourth-quarter earnings per share of $0.59, $0.04  ahead of the average analyst estimate. Revenue just missed the expected mark at $7.7 billion for the quarter, but that still represented a year-over-year gain of 6%. With a 14% growth out of DuPont's agricultural business, the company's earnings report should be impressing investors – not disappointing with a Dow-bottoming drop.

Dan Carroll has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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Stocks Mentioned

Dow Jones Industrial Average (Price Return) Stock Quote
Dow Jones Industrial Average (Price Return)
^DJI
$34,347.03 (0.45%) $152.97
Pfizer Stock Quote
Pfizer
PFE
$49.21 (0.74%) $0.36
DuPont Stock Quote
DuPont
DD

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