Pfizer Inc (NYSE:PFE) provided a tepid outlook for 2016 after delivering better than expected earnings, as well as, the revenue for the fourth quarter of 2015. Its guidance fell shy of the Street analysts’ estimations. However, its Chairman and CEO, Ian Read, expects to deliver another strong year due to its belief in key products that will continue to perform well. He also placed his bet on its product pipeline.
Pfizer Inc reported net income of $613 million, down 50% from $1.23 billion while earnings plunged 47% to ten cents a share from 19 cents a share in the year-ago quarter. On an adjusted basis too, its net income fell 4% to $3.306 billion from $3.44 billion whereas adjusted earnings slackened 2% to 53 cents a share from 54 cents a share in the same period last year.
The company’s revenue grew by 7% to $14.05 billion from $13.12 billion. Foreign currency had an unfavorable impact of 7%. Its innovative products revenue increased 22% to $7.64 billion from $6.63 billion in the previous year quarter. On the other hand, established products revenue grew 5% to $6.26 billion from $6.41 billion. The pharmaceutical firm’s cost of sales as a percentage of revenue was 21.2% compared to 19.7%.
Outlook For The Year 2016
Moving ahead, Pfizer said that it was looking to deliver revenue of $49 – $51.0 billion for the current year. This was lower than the Street analysts’ expectations of $52.49 billion. While looking to deliver reported earnings of $1.54 – $1.67 a share, the pharmaceuticals firm expects adjusted earnings of $2.20 – $2.30 a share for the same period. This was also lower than the Street analysts’ predictions of $2.36 a share.
Pfizer said that it expects adjusted cost of sales as a percentage of revenue to be 21.0 – 22.0%. The company expects R&D expenses to be $7.3 – $7.8 billion. The company said that its guidance reflected the expected mid-to-high-single digit operational revenue uptick on an enterprises basis. However, the company also sees $2.3 billion as unfavorable impact from the generic competition for the products which have either lost patent or will it soon.