Geographical performance

As we discussed earlier in this series, Pfizer (PFE) reported a 2% decline in revenues to $12.89 billion in 2Q17, compared to revenues of $13.15 billion in 2Q16. The company reported nearly flat revenues from US markets as well as nearly flat revenues at constant exchange rates for international markets in 2Q17.

Understanding Pfizer’s Geographical Performance in 2Q17

Overall, Pfizer’s revenues were nearly flat at the operational level, offset by a 2% negative impact of foreign exchange in 2Q17.

Performance in the US markets

Revenues from US markets fell marginally to $6,345 million in 2Q17, compared to $6,370 million in 2Q16. This total includes an increase of 12% in revenues from the innovative health segment to $4.44 billion in 2Q17, compared to $3.95 billion in 2Q16.

The factors driving growth in US markets in 2Q17 include the following.

  • The innovative health segment reported 12% growth in US markets in 2Q17, mainly driven by increased sales of Lyrica, Chantix, Eliquis, Ibrance, Xeljanz, and Xalkori.
  • The essential health segment reported a 21% decrease in US markets. However, Effexor, Medrol, Revatio, Precedex, and Biosimilar Inflectra/Remsima reported growth in 2Q17.

Performance in international markets

Revenues from international markets fell 3% to $6.55 billion in 2Q17, compared to $6.78 billion in 2Q16. This impact includes flat operating revenues, offset by a 3% negative impact of foreign exchange.

The factors driving growth in international markets in 2Q17 include the following.

  • Revenues from the innovative health segment reflected 5% operational growth to $3.23 billion, driven by strong performance of Lyrica, Eliquis, Xalkori, Xeljanz, Refacto AF, Prevnar Vaccines, FSME/IMMUN-TicoVac vaccines, and the Consumer Healthcare franchise.
  • The essential health segment reported a 5% decrease in operating revenues in 2Q17, mainly due to lower sales of Peri-LOE products and CenterOne revenues.

The Vanguard Healthcare ETF (VHT) invests 5.6% of its total assets in Pfizer (PFE). VHT also invests 4.9% of its portfolio in Merck and Co. (MRK), 2.7% in Bristol-Myers Squibb (BMY), and 2.3% in Eli Lilly and Co. (LLY).

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