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Is Pfizer Expecting a Rise in Its Expenses in 2019?

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Jan. 23 2019, Updated 7:30 a.m. ET

EPS projections

On its third-quarter earnings conference call, Pfizer (PFE) predicted adjusted EPS of $2.98–$3.02 for 2018, a YoY (year-over-year) rise of 13% at the midpoint. Wall Street analysts expect the company’s adjusted EPS to be $3.00, a YoY rise of 13.24%, in 2018. The company is also expected to report GAAP (generally accepted accounting principles) EPS of $2.36, a YoY fall of 33.03%, in 2018.

Wall Street analysts expect Pfizer to report adjusted EPS and GAAP EPS of $0.64 and $0.45, respectively, in the fourth quarter of 2018.

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Expense projections

Wall Street analysts expect Pfizer to report selling, general, and administrative expenses of $4.13 billion, a YoY fall of 4.44%, in the fourth quarter of 2018. The company is also expected to report R&D (research and development) expenses of $2.35 billion, a YoY rise of 2.43%, in the fourth quarter of 2018.

According to Pfizer’s 37th Annual J.P. Morgan Healthcare Conference transcript, the company expects its R&D expenses to rise in 2019 due to its maturing research programs now entering more expensive development phases. The company, however, is focused on controlling its overhead R&D expenses.

According to Pfizer’s 37th Annual J.P. Morgan Healthcare Conference transcript, the company also expects a significant rise in its direct SI&A (selling, information, and advertising) expenses in 2019. This is attributable to increased spending on a direct sales force, physician awareness, and direct-to-consumer marketing, which precedes major new product launches. To partly offset the impact of its growing SI&A expenses, Pfizer is aiming to control its indirect SI&A expenses.

 

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