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What to Expect from Pfizer’s 2Q17 Earnings?

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What to Expect from Pfizer’s 2Q17 Earnings? PART 1 OF 3

Inside Pfizer’s 2Q17 Earnings: Analyst Estimates

A look at Pfizer’s earnings

Headquartered in New York City, Pfizer (PFE) is one of the largest pharmaceutical companies by revenue. The company is set to release its 2Q17 earnings on August 1, 2017. Analysts estimate EPS (earnings per share) of $0.66 on revenues of ~$13.1 billion for 2Q17.

Inside Pfizer’s 2Q17 Earnings: Analyst Estimates

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2Q17 revenue estimates

Analysts estimate its revenues for 2Q17 to show a 0.5% decline in revenues to $13.08 billion, as compared to $13.14 billion for 2Q16. Revenues are expected to decline due to lower sales from the Essential Health segment, substantially offset by the Innovative Health segment.

The Innovative Health business is expected to report operational growth due to the strong performance of Eliquis, Ibrance, Lyrica, Xeljanz, and Xtandi. But the Essential Health business is expected to report lower sales due to the weaker performance of Celebrex, Zyvox, Lyrica, and legacy established products.

Profitability estimates

The analysts’ estimates show a gross profit margin of 79.1% for 2Q17, which would be a 3.3% growth over Pfizer’s 75.9% in 2Q16. R&D (research and development) expenses are expected to rise 1%, while the SG&A (selling, general, and administrative) expenses as a percentage of total revenues are expected to fall 2%.

Pfizer’s EBITDA (earnings before interest, tax, depreciation, and amortization) margin is expected to fall to 44.0% in 2Q17, compared with 47.6% in 2Q16. Net adjusted income is expected to rise to ~$3.94 billion in 2Q17, compared with $3.90 billion in 2Q16.

To divest company-specific risks, investors can consider ETFs like the iShares US Pharmaceuticals ETF (IHE), which has 8.1% of its assets in Pfizer. IHE also has 7.6% in Merck (MRK), 5.9% in Eli Lilly (LLY), and 6.1% in Bristol-Myers Squibb (BMY).

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