Pfizer Beats on EPS but GAAP Results Lag

Pfizer (NYS: PFE) reported earnings on Jan. 31. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended Dec. 31 (Q4), Pfizer met expectations on revenues and beat expectations on earnings per share.

Compared to the prior-year quarter, revenue shrank and GAAP earnings per share increased significantly.

Gross margins grew, operating margins dropped, and net margins dropped.

Revenue details
Pfizer logged revenue of $16.75 billion. The 16 analysts polled by S&P Capital IQ expected to see revenue of $16.66 billion. Sales were 4.6% lower than the prior-year quarter's $17.56 billion.


Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions.

EPS details
Non-GAAP EPS came in at $0.50. The 19 earnings estimates compiled by S&P Capital IQ predicted $0.47 per share on the same basis. GAAP EPS of $0.18 for Q4 were 49% lower than the prior-year quarter's $0.36 per share.


Source: S&P Capital IQ. Quarterly periods. Figures may be non-GAAP to maintain comparability with estimates.

Margin details
For the quarter, gross margin was 76.7%, 80 basis points better than the prior-year quarter. Operating margin was 16.4%, 280 basis points worse than the prior-year quarter. Net margin was 8.6%, 790 basis points worse than the prior-year quarter.

Looking ahead
Next quarter's average estimate for revenue is $15.55 billion. On the bottom line, the average EPS estimate is $0.58.

Next year's average estimate for revenue is $63.04 billion. The average EPS estimate is $2.30.

Investor sentiment
The stock has a four-star rating (out of five) at Motley Fool CAPS, with 5,492 members out of 6,087 rating the stock outperform, and 595 members rating it underperform. Among 1,492 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 1,402 give Pfizer a green thumbs-up, and 90 give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Pfizer is outperform, with an average price target of $23.13.

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At the time this article was published Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor ofMotley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. Motley Fool newsletter services have recommended buying shares of Pfizer. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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