Pfizer (PFE) Q3 2022 earnings summary

Executive summary

• Q3 revenue declined 2% operationally YoY, while revenue excluding direct sales and alliance revenue from COVID-19 products grew 2% operationally. Adjusted diluted EPS rose 44% operationally.

• Long-term growth plans rely on business development and pipeline launches to offset an expected ~$17B revenue impact from LOEs during 2025–2030.

Financial highlights

• Q3 revenue decreased 2% operationally YoY but was up more than 120% versus Q3 2020; the YoY decline reflected strong prior-year results and Comirnaty delivery timing.

• Reported diluted EPS was $1.51, up 6%; adjusted diluted EPS was $1.78, up 44% operationally.

• Adjusted gross margin expanded 1,450 bps YoY, primarily from higher Paxlovid sales and lower Comirnaty sales, partly offset by a $400M Paxlovid excess-raw-material charge.

• Adjusted SI&A expense grew 23% operationally and adjusted R&D expense grew 2% operationally, driven by COVID product spending, acquired assets and selected R&D programs.

• FX reduced Q3 revenue by ~$950M and adjusted diluted EPS by $0.05.

Outlook and guidance

• 2022 guidance midpoints imply operational revenue growth of 31% and adjusted diluted EPS growth of 70% versus 2021, revised from 29% and 65%, respectively.

• COVID-19 vaccine revenue guidance rose to ~$34B, up $2B; Paxlovid revenue guidance remained ~$22B despite additional FX headwinds.

• Over the next 18 months, up to 19 products or indications are expected to reach market; more than two-thirds could be blockbusters, and 15 internally developed projects could represent ~$20B in 2030 sales if successful.

• Business development is targeted to add at least $25B in risk-adjusted 2030 revenue; COVID-19 franchises are expected to remain multibillion-dollar revenue generators for the foreseeable future.

• Potential RSV vaccine launches are targeted for 2023, etrasimod for 2H 2023 pending approval, and intranasal zavegepant for 2023 pending FDA approval.