Pfizer Beats Street Reporting Q4 & Full-Year 2017 Earnings
Pfizer (PFE) reported earnings on 1/30/2018 of $0.62/share firmly beating estimates of $0.583 per share.
Pfizer’s abbreviated notes are as follows:
- Full-Year 2017 Revenues of $52.5 Billion, Comparable with Full-Year 2016 Operationally; Excluding Impact of February 2017 Divestiture of Hospira Infusion Systems (HIS), Revenues Increased 2% Operationally
- Fourth-Quarter 2017 Revenues of $13.7 Billion, Comparable with Fourth-Quarter 2016 Operationally; Excluding Impact of February 2017 Divestiture of HIS, Revenues Increased 2% Operationally
- Full-Year 2017 Reported Diluted EPS(1) of $3.52, Adjusted Diluted EPS(2) of $2.65; Fourth-Quarter 2017 Reported Diluted EPS(1) of $2.02, Adjusted Diluted EPS(2) of $0.62
- Provides 2018 Financial Guidance, Including Revenues of $53.5 to $55.5 Billion, Adjusted Diluted EPS(2) of $2.90 to $3.00 and Adjusted Effective Tax Rate(2) of Approximately 17.0%
- 2018 Guidance Midpoints Imply Revenue Growth of 4% and Adjusted Diluted EPS(2) Growth of 11% Anticipates Repatriation Tax Liability of Approximately $15 Billion, Payable to the U.S. Treasury
Ian Read, Chairman and Chief Executive Officer, stated, “Pfizer had a strong year in 2017, delivering solid financial results, advancing several significant pipeline programs and enhancing shareholder value with prudent capital allocation decisions. Regarding our revenue performance in 2017, Pfizer Innovative Health was driven by continued strength from several anchor brands, including Ibrance, Eliquis and Xeljanz — all of which currently have market-leading positions with many years of patent protection remaining. Pfizer Essential Health generated strong operational revenue growth in emerging markets and in our Biosimilars portfolio but was negatively impacted by the HIS divestiture, the expected impact of product losses of exclusivity and legacy Hospira product shortages in the U.S.
“In 2017, we received ten approvals from the FDA, significantly more than Pfizer has achieved in any year in the past decade. Building on these achievements, during 2018 we look forward to important regulatory decisions and clinical data readouts across our pipeline that will drive the next wave of innovation at Pfizer.
“I believe our capital allocation decisions in 2017 enhanced shareholder value. In addition to investing in our business, we also returned $12.7 billion directly to shareholders through a combination of dividends and share repurchases and we decided to explore potential strategic alternatives for our Consumer Healthcare business. We remain on track to make this decision, which could include everything from a full or partial separation to ultimately deciding to retain the business, during 2018.
“I believe our current management and business structure, the tireless dedication of our colleagues and the strong culture we have nurtured position Pfizer especially well for continued success,” Mr. Read concluded.
Frank D’Amelio, Executive Vice President, Business Operations and Chief Financial Officer, stated, “Overall, I am pleased with our 2017 financial performance. Despite absorbing a $2.1 billion impact from products that recently lost marketing exclusivity, we were still able to achieve 1% operational revenue growth in 2017 after excluding the net impact of acquisitions and divestitures completed in 2016 and 2017. We also delivered Adjusted diluted EPS(2) growth of 11% in 2017, primarily reflecting a lower effective tax rate due to tax reform, strong performance of key products, continued success in managing our operating expenses and the net impact of our share repurchases.
“Our 2018 financial guidance at the midpoint of our ranges implies revenue growth of 4% and Adjusted diluted EPS(2) growth of 11% compared to 2017 results, which absorbs an anticipated $2.0 billion revenue headwind due to products that recently lost marketing exclusivity. Our effective tax rate on Adjusted income(2) is expected to be approximately 17.0% in 2018, significantly lower than the approximately 23.0% that we previously anticipated for full-year 2017, prior to the enactment of tax reform. Notably, our guidance for Adjusted diluted EPS(2) anticipates share repurchases totaling $5.0 billion in 2018, which is expected to be offset by approximately half due to dilution related to share-based employee compensation programs.
“Finally, regarding tax reform, I am pleased that the aspects of most importance to us were addressed in the new tax code, strengthening our ability to make capital allocation decisions that maximize patient benefit and enhance shareholder value. In addition to an anticipated effective tax rate on Adjusted income(2) in 2018 that is meaningfully lower than in prior years, Pfizer anticipates a repatriation tax liability of approximately $15 billion payable to the U.S. Treasury over eight years as a result of the passage of the TCJA,” Mr. D’Amelio concluded.