On the first day of trading following the Pfizer’s (NYSE: PFE) announcement of weaker-than-expected sales for its COVID-19 vaccine and coronavirus treatment, the company’s shares are largely unimpacted. This revelation prompted a significant downward revision in revenue projections, signaling a challenging year ahead.
While both products saw declining sales in the second quarter, Pfizer had expressed optimism in August about a second-half recovery in 2023.
Pfizer reported on Friday that global usage of Paxlovid is slightly above last year’s figures but remains below initial expectations. Given that the fall vaccination season has just begun, it is too early for the New York-based company to gauge the vaccination rates for the year accurately.
For the full year, Pfizer now anticipates revenue of approximately $12.5 billion for Paxlovid and Comirnaty combined, a significant $9 billion drop from its earlier forecast. This revision includes factors like the delayed commercialization of Paxlovid, pushed to January 2024 from the previous estimate of the second half of this year. Pfizer is lowering its 2023 revenue expectations for Comirnaty by roughly $2 billion due to lower-than-expected vaccination rates, while the remainder is related to a cut in its Paxlovid sales forecast. The company also revealed that the U.S. government would return 7.9 million unused courses of the treatment by year-end.
As a result, Pfizer Inc. now projects 2023 revenue within the range of $58 billion to $61 billion, marking a departure from its previous outlook of $67 billion to $70 billion. Adjusted earnings for the year are now estimated to be between $1.45 and $1.65 per share due to underwhelming revenue from COVID-19-related products and inventory write-offs. This falls short of Wall Street’s full-year revenue projection of $63.61 billion and earnings of $2.77 per share, and is significantly below Pfizer’s prior per-share earnings forecast ranging from $3.25 to $3.45.
In response to this development, JPMorgan noted that Pfizer’s update could resolve an ongoing debate regarding U.S. Paxlovid inventory and expressed anticipation that the company’s more substantial-than-expected cuts to sales projections might provide some support to per-share earnings expectations for the next year.
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