The largest US drug manufacturer Pfizer Inc (NYSE: PFE) reported a swing to profit in the fiscal 2016 fourth-quarter, compared with a net loss in the similar quarter of fiscal 2015. However, the non-GAAP earnings declined 11% y-o-y. The company also missed Wall Street earnings estimates by 3 cents. Still, considering the details provided below, we anticipate the stock to remain bullish. The stock of Pfizer closed at $32.21 on Monday.
The Brooklyn, New York-based company reported a decline in the fiscal 2016 fourth-quarter revenues to $13.63 billion, from $14.05 billion in last year’s similar quarter. Pfizer reported a fourth-quarter GAAP net profit of $775 million or $0.13 per share, compared with a net loss of $172 million or $0.03 per share in the last year. The quarterly revenue was higher than Zacks consensus estimates of $13.55 billion.
Excluding charges, the 4Q16 non-GAAP net income fell 12% to $2.89 billion, from $3.31 billion in 4Q15. On a per-share basis, fourth-quarter earnings fell to $0.47 per share, from $0.53 per share in the similar quarter last year, and lower than Zacks estimates of $0.50 per share.
The sales of Prevnar 13, a pneumococcal conjugate vaccine, decreased 23% to $1.42 billion in the quarter ended December 2016. However, the company clarified that it had already captured the possible market for the drug and the runaway success of the drug after its launch in the fourth quarter of 2014 makes it look as if the drug is losing popularity.
Evercore ISI analysts stated that the sales of sterile injectable products and rheumatoid arthritis treatment drug Xeljanz topped their expectations. Even the fiscal 2016 revenue of $643 million generated from the sales of cancer drug Ibrance has exceeded expectations.
The company stated that its eczema treatment Eucrisa, which was added to its drug portfolio through the acquisition of Anacor Pharmaceuticals for $5.2 billion, will be available from early February onwards. Analysts expect the Eucrisa drug to bring in revenue of as much as $2 billion per annum for Pfizer.
For fiscal 2017, Pfizer expects a non-GAAP profit of between $2.50 and $2.60 per share. The revenue is anticipated to be in the range of $52 billion to $54 billion. On average, analysts are forecasting earnings of $2.56 per share on revenues of $54.03 billion. Thus, considering the positive developments, fundamentally, we anticipate the stock of Pfizer to remain bullish in the days ahead.
The chart shows strong support for the stock at 31.50 levels. The stochastic oscillator is out of the bearish zone, while the rising accumulation/distribution indicator confirms the flow of money into the stock. So, the stock can be expected to trend higher and reach the next resistance level of 33.50.
A high or above contract would enable a binary trader to profit from the forecast. The contract can be bought from a binary broker of choice on the condition that the stock should not be trading above $32.50 at the time of purchase. A time period of seven trading days should be allowed for the expiry of the contract.
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