10-QPeriod: Q2 FY2019

PFIZER INC Quarterly Report for Q2 Ended Jun 30, 2019

Filed August 8, 2019For Securities:PFE

Summary

Pfizer Inc. reported total revenues of $13.26 billion for the second quarter of 2019, a slight decrease of 2% compared to the prior year quarter, largely due to unfavorable foreign exchange impacts. Despite the revenue dip, net income attributable to Pfizer Inc. saw a significant increase of 30% to $5.05 billion, driven by a favorable tax provision and lower costs. The company highlighted key strategic moves, including the completion of the Consumer Healthcare joint venture with GSK and the acquisition of Array BioPharma. Additionally, Pfizer announced an agreement to combine its Upjohn business with Mylan, signaling a significant restructuring aimed at optimizing its portfolio and focusing on its Biopharma segment. These strategic actions are expected to reshape Pfizer's future business landscape.

Financial Highlights

54 data points
Beta

Revenue

$13.26B

80.6% Gross Margin

Net Income

$5.05B

38.0% Net Margin

EPS (Diluted)

$0.89

Total Assets

$156.20B

Cash & Equivalents

$1.78B

Free Cash Flow

$2.13B

Financial Statements
Beta
Revenue$13.26B
Cost of Revenue$2.58B
Gross Profit$10.69B
SG&A Expenses$3.51B
Operating Income$8.93B
Interest Expense$389.00M
Net Income$5.05B
EPS (Basic)$0.91
EPS (Diluted)$0.89
Shares Outstanding (Basic)5.56B
Shares Outstanding (Diluted)5.67B

Key Highlights

  • 1Total revenues for the second quarter of 2019 were $13.26 billion, a 2% decrease from the prior year's quarter, primarily due to foreign exchange headwinds.
  • 2Net income attributable to Pfizer Inc. increased significantly by 30% to $5.05 billion ($0.89 diluted EPS), driven by a substantial tax benefit and improved operational efficiency.
  • 3The company closed its Consumer Healthcare joint venture with GSK, receiving a 32% equity stake in the new entity.
  • 4Pfizer announced the acquisition of Array BioPharma for approximately $11.4 billion to bolster its oncology portfolio.
  • 5A significant strategic announcement was the agreement to combine its Upjohn business with Mylan, creating a new global pharmaceutical company.
  • 6Biopharma segment revenues grew operationally by 6%, driven by key brands like Ibrance and Eliquis, offsetting declines in other areas.
  • 7Upjohn segment revenues declined operationally by 7%, impacted by generic competition for key products like Lyrica and Viagra.

Frequently Asked Questions

Pfizer reported total revenues of $13.26 billion for the second quarter of 2019, a decrease of 2% compared to the $13.47 billion in the same period of 2018. This decline was primarily driven by an unfavorable foreign exchange impact of $527 million, which more than offset an operational revenue increase of $324 million.

Net income attributable to Pfizer Inc. increased significantly by 30% to $5.05 billion, compared to $3.87 billion in the prior year's quarter. Diluted EPS also saw a substantial increase, rising 37% to $0.89 from $0.65 in Q2 2018. This improvement was largely due to a favorable tax provision of $(915) million in Q2 2019 compared to a provision of $648 million in Q2 2018.

Pfizer completed several significant strategic transactions. This includes the formation of a new Consumer Healthcare joint venture with GSK, where Pfizer received a 32% equity stake. Additionally, Pfizer acquired Array BioPharma for approximately $11.4 billion to enhance its oncology offerings. The company also announced a definitive agreement to combine its Upjohn business with Mylan, creating a new global pharmaceutical company.

The Biopharma segment's revenues increased by 2% to $9.6 billion, with a 6% operational increase driven by key brands like Ibrance, Eliquis, and Xeljanz. The Upjohn segment's revenues decreased by 11% to $2.8 billion, reflecting a 7% operational decline primarily due to generic competition for products such as Lyrica and Viagra, and also impacted by volume-driven growth from Celebrex and Effexor.