Earnings Preview: Pfizer

Pfizer (PFE) is expected to report Q3 earnings Tuesday Oct. 21 before market open, with a conference call scheduled for 10:00 am ET.

Guidance

Analysts are looking for a profit of 60c on revenue of $12B. The consensus range is 55c to 63c for EPS, and revenue of $11.53B to $12.34B, according to First Call.

Analyst Views

In its Q2 earnings release Pfizer reported Q2 EPS 55c vs. consensus of 54c and revenue of $12.13B vs. consensus of $11.46B. Possible EPS drivers include increased sales of Lyrica and Celebrex and growing sales from newer drugs like Sutent and Chantix. Negative factors effecting earnings include decreases in sales of Norvasc any Zyrtec.

On October 8, Pfizer was upgraded to Buy from Underperform at Merrill Lynch, citing the attractive dividend yield and stabilizing business.

On October 1, Deutsche Bank noted that Pfizer shares outperform during uncertain times given Pfizer's attractive 7% dividend yield and strong balance sheet. The firm thinks no catalysts are priced into the stock, and several are possible. The firm has a Buy rating on the stock.

Comments

[weiwentg:]

Bruce Berkowitz has about 10% of the Fairholme Fund's assets in Pfizer. his long term thesis is that Pfizer will use its cash hoard to buy out or partner with smaller and more nimble drug or biotech companies. they have the cash to become a bit like a mini-Berkshire in the pharma space - the question is, will they?

2008 Oct 20 03:29 PM

[WorkerOnWal...:]

All of the voices screaming that Pfizer should buy some pharmas or biotechs are doing so because they own those potential targets. NONE of them think about what's good for Pfizer- they just want to sell their overpriced companies to Pfizer.

Pfizer management, like Warren Buffett, have done an excellent job so far and not rushed into bad deals just because these vested interests are screaming for them! Pfizer's plans are long term, but you should see them start to make sense in a few months. Look at their pipeline and their plans.

Pfizer should spend the cash hoard wisely. So far they appear to be doing the right things!

2008 Oct 20 08:46 PM