Summary
Pfizer Inc. reported a notable increase in net income for the third quarter and first nine months of 2018 compared to the prior year, driven by significant favorable tax adjustments related to the Tax Cuts and Jobs Act (TCJA) and operational growth across key products. Revenues saw a modest 1% increase year-over-year for the third quarter, reaching $13.3 billion, and a 2% increase for the first nine months to $39.7 billion. This growth was primarily fueled by the Innovative Health (IH) segment, which saw strength in products like Eliquis, Ibrance, Xeljanz, and Prevnar 13, despite headwinds in some legacy products and therapeutic areas. The company's financial position remains strong with substantial cash and investments, although short-term and long-term debt remain significant. Pfizer also continued its share repurchase program, demonstrating a commitment to returning capital to shareholders. The company reiterated its full-year 2018 financial guidance, indicating confidence in its operational performance despite some downward revenue revisions due to foreign exchange rates and Essential Health performance.
Key Highlights
- 1Net income attributable to Pfizer Inc. increased significantly by 45% to $4.11 billion ($0.69 per diluted share) for the third quarter of 2018, and by 28% to $11.55 billion ($1.92 per diluted share) for the first nine months.
- 2Total revenues for the third quarter of 2018 were $13.3 billion, a 1% increase compared to the prior year, with operational growth of 2% largely offset by unfavorable foreign exchange impacts.
- 3The Innovative Health (IH) segment demonstrated robust growth, with revenues increasing by 4% to $8.5 billion in Q3 and 6% to $24.6 billion in the first nine months, driven by strong performances from key brands like Eliquis, Ibrance, and Xeljanz.
- 4The Essential Health (EH) segment experienced a revenue decline of 4% to $4.8 billion in Q3 and 3% to $15.1 billion in the first nine months, impacted by ongoing product shortages in the Sterile Injectable Pharmaceuticals (SIP) portfolio and competitive pressures on legacy products.
- 5The provision for taxes on income saw a substantial decrease of 91% to $66 million for the third quarter and 44% to $1.27 billion for the nine months, reflecting the favorable impact of the Tax Cuts and Jobs Act (TCJA) and a lower effective tax rate.
- 6The company completed an accelerated share repurchase agreement of $4.0 billion in March 2018 and continued with other share repurchases, repurchasing approximately 46.7 million shares in Q3 2018.
- 7Pfizer reaffirmed its full-year 2018 financial guidance for Adjusted diluted EPS in the range of $2.98 to $3.02, although it narrowed the revenue guidance range to $53.0 to $53.7 billion.