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Pfizer: Revenue Growth Is Expected in 4Q17

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Pfizer’s revenue estimates

As we discussed earlier, Wall Street analysts expect Pfizer’s (PFE) revenues to increase ~0.7% to $13.72 billion during 4Q17—compared to revenues of $13.63 billion during 4Q16. The revenue growth is expected to be driven by innovative health products.

The above chart compares Pfizer’s actual revenues since 1Q16 with analysts’ estimates for 4Q17. For fiscal 2017, the revenues are expected to decrease ~0.5% to $52.55 billion—compared to revenues of $52.82 billion during 2016.

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Segment-wise expectations 4Q17

Pfizer’s products are classified into two business segments—the Innovative Health segment and Essential Health segment.

The Innovative Health segment includes pharmaceutical products, vaccines, and consumer health products. For 4Q17, the innovative health business is expected to report revenue growth following increased sales of Ibrance and Eliquis inside and outside US markets. There were increased sales of Xeljanz and Lyrica in US markets. Xtandi sales were included following the acquisition of Medivation in 2016.

The Essential Health segment includes established pharmaceutical products and a few of the products from Hospira. For 4Q17, the Essential Health segment is expected to report lower revenues following the divestiture of Hospira Infusion systems, lower sales of Peri-LOE products, lower sales of sterile injectable products, and lower sales of other established products. However, the decline is expected to be partially offset by an increase in the sales of biosimilars due to increased demand.

For 4Q17, the foreign exchange could have a marginally negative impact on Pfizer’s overall revenues.

The SPDR S&P Pharmaceuticals ETF (XPH) has 4.3% of its total investments in Pfizer, 4.5% in Perrigo (PRGO), 4.6% in Merck & Co. (MRK), and 4.4% in Johnson & Johnson (JNJ).

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