Pfizer (PFE) Q2 2021 earnings summary

Executive summary

• Q2 revenue grew 86% operationally, driven by COVID-19 vaccine sales and growth across other key products; revenue excluding vaccine direct sales and alliance revenues rose 10% operationally.

• More than 1 billion vaccine doses had shipped since December 2020; full-year 2021 guidance for revenue and Adjusted diluted EPS was raised.

Financial highlights

• Q2 reported diluted EPS increased 58% YoY; Adjusted diluted EPS increased 73%.

• Adjusted cost of sales reduced gross margin by 19 percentage points YoY, primarily due to the vaccine gross-profit split and royalties.

• Adjusted tax rate rose to 16.6%; foreign exchange benefited revenue by 6% and Adjusted diluted EPS by $0.03.

Outlook and guidance

• FY2021 revenue guidance: $78.0B–$80.0B, including projected COVID-19 vaccine revenue of ~$33.5B based on contracts signed through mid-July; the latest U.S. dose contract was excluded.

• FY2021 Adjusted diluted EPS guidance increased to $3.95–$4.05, or 77% growth at midpoint vs. 2020, including an expected 4% FX benefit.

• Excluding the vaccine, FY2021 revenue guidance is $45B–$47B, representing ~7% operational growth at midpoint; Adjusted diluted EPS is $2.55–$2.65, or ~11% operational growth.

• Long-term outlook: risk-adjusted revenue CAGR of at least 6% and double-digit bottom-line growth through 2025; projections exclude the vaccine, business development and potential future mRNA programs.

• Vaccine manufacturing capacity could reach 3B doses by year-end 2021; ~2.1B doses were contracted for 2021 delivery as of mid-July.