Pfizer (NYSE:PFE) is moving closer to finalizing its acquisition of Wyeth (NYSE:WYE), but for now, it's still a stand-alone company. Let's look at what to expect when the pharmaceutical giant releases earning tomorrow.

What analysts say:

  • Buy, sell, or waffle? With 12 buys and five holds, more analysts believe that Pfizer is a steal at these beaten-down levels
  • Revenue. Like many companies with a global presence, the stronger dollar will affect year-over-year comparisons; analysts expect a 6.6% decrease in revenue compared to the year-ago quarter.
  • Earnings. The bottom line isn't expected to fare much better, with the average analyst expecting earnings to come in at $0.48 per share, down from an adjusted $0.55 per share last year.

What management says:
The mantra at Pfizer seems to be that emerging markets are the new Lipitor. The company has a goal of adding $3 billion in annual emerging-market sales by 2012, joining GlaxoSmithKline (NYSE:GSK) and sanofi-aventis (NYSE:SNY), which are also moving into the untapped markets. It's a relatively low-risk strategy compared to developing new drugs, but it remains to be seen how much it can really contribute to the bottom line, especially since most of the growth is likely to come from a dive into low-margin generics, rather than higher-margin branded products

What management does:
Pfizer's year-over-year comparisons have become relevant again, now that they no longer include the consumer health-care business it sold to Johnson & Johnson (NYSE:JNJ) in late 2006. Of course, year-over-year comparisons will be difficult when Pfizer completes its acquisition of Wyeth, which ironically comes with a consumer health-care division.

Margins

12/2007

3/2008

6/2008

9/2008

12/2008

3/2009

Gross

84%

83.7%

83.7%

83.5%

85.1%

85.9%

Operating

30.5%

29.3%

31.1%

31.5%

34.8%

35.8%

Net

16.8%

15.8%

18.5%

21.6%

16.8%

17%

FCF/Revenue

23.7%

27.9%

30.2%

28.8%

34.2%

35.2%

Y-O-Y Growth

12/2007

3/2008

6/2008

9/2008

12/2008

3/2009

Revenue

0.1%

(2.7%)

0.8%

1.4%

(0.3%)

(1%)

Source: Capital IQ, a division of Standard & Poor's. Data reflects trailing-12-month performance for the quarters ended in the named months.

Pfizer's changes in revenue are something only a lazy hiker could enjoy -- flat, flat, and flat. New drugs haven't been enough to make up for decreasing sales of Lipitor as it faces competition from cheap generic versions of Merck's (NYSE:MRK) Zocor. Fortunately, the company has been able to increase operating margins, if only ever so slightly, as it prepares for the walk off the Lipitor generics cliff.

One Fool says:
I want to love Pfizer. Its beaten-down price and solid dividend make it look tempting.

But previous large acquisitions of Warner-Lambert and Pharmacia haven't exactly created long-term shareholder value. This time with Wyeth could be different, but investors would be wise to take a lesson from Missouri and adopt a show-me attitude. Staying in your bear cave until it's safe to come out may result in missing a run-up to fair value, but it'll also keep you from jumping into quicksand.

Pfizer is a recommendation of the Inside Value newsletter. If you're interested in picking through the wreckage for possible turnaround candidates, you should have the Inside Value team on your side. Check it out for free with a 30-day trial.

Fool contributor Brian Orelli, Ph.D., doesn't own shares of any company mentioned in this article. Johnson & Johnson is a selection of the Income Investor newsletter. The Fool has a disclosure policy.