10-QPeriod: Q2 FY2015

PFIZER INC Quarterly Report for Q2 Ended Jun 28, 2015

Filed August 6, 2015For Securities:PFE

Summary

Pfizer Inc. reported a decrease in revenues for the second quarter and first six months of 2015 compared to the prior year, primarily due to unfavorable foreign exchange impacts, although operational performance showed some resilience. The company saw a revenue increase from key products like Prevnar 13, Eliquis, and Lyrica, but this was offset by the loss of exclusivity for significant drugs such as Celebrex and Zyvox. Despite the revenue headwinds, Pfizer is actively pursuing growth through strategic acquisitions, notably the pending acquisition of Hospira, which is expected to close in the second half of 2015 and contribute to future synergies. The company's financial position remains strong, supported by robust operating cash flows, allowing for continued investments in R&D and shareholder returns through dividends and share repurchases.

Financial Highlights

54 data points
Beta

Revenue

$11.85B

81.6% Gross Margin

Net Income

$2.63B

22.2% Net Margin

EPS (Diluted)

$0.42

Total Assets

$160.88B

Cash & Equivalents

$3.67B

Free Cash Flow

$3.83B

Financial Statements
Beta
Revenue$11.85B
Cost of Revenue$2.18B
Gross Profit$9.67B
SG&A Expenses$3.39B
Operating Income$5.00B
Interest Expense$278.00M
Net Income$2.63B
EPS (Basic)$0.43
EPS (Diluted)$0.42
Shares Outstanding (Basic)6.16B
Shares Outstanding (Diluted)6.24B

Key Highlights

  • 1Total revenues for Q2 2015 were $11.9 billion, down 7% year-over-year (1% operationally).
  • 2Total revenues for the first six months of 2015 were $22.7 billion, down 6% year-over-year (2% operationally).
  • 3Net income attributable to Pfizer Inc. for Q2 2015 was $2.6 billion, a decrease from $2.9 billion in Q2 2014.
  • 4Earnings per diluted share for Q2 2015 were $0.42, down from $0.45 in Q2 2014.
  • 5The company announced a definitive agreement to acquire Hospira, Inc. for approximately $17 billion, expected to close in the second half of 2015.
  • 6Key product revenues increased operationally, driven by Prevnar 13, Eliquis, and Lyrica, but were impacted by significant product losses of exclusivity.
  • 7Pfizer continued its share repurchase program, repurchasing shares worth $6.0 billion in the first six months of 2015.

Frequently Asked Questions

Pfizer's total revenues decreased by 7% to $11.9 billion in the second quarter of 2015 and by 6% to $22.7 billion in the first six months of 2015, compared to the respective periods in 2014. This decline was primarily attributed to unfavorable foreign exchange impacts, although operational revenues showed a slight increase.

Revenue growth was driven by strong operational performance from key products such as Prevnar 13, Eliquis, and Lyrica. However, these gains were significantly offset by the loss of exclusivity and resulting generic competition for major products like Celebrex and Zyvox.

The most significant development is the pending acquisition of Hospira, Inc., valued at approximately $17 billion, which is expected to close in the latter half of 2015 and is anticipated to generate substantial annual synergies. Pfizer also completed the acquisition of Baxter's marketed vaccines business in December 2014 and entered into various collaborations.

Despite a revenue decline, Pfizer managed its expenses effectively. Cost of sales and Selling, Informational, and Administrative (SI&A) expenses decreased year-over-year, partly due to favorable foreign exchange and cost-reduction initiatives. Research and development expenses saw an increase in the first six months, mainly due to an upfront payment for a collaboration agreement with OPKO Health.