Pfizer (PFE) Q2 2017 earnings summary

Executive summary

• Q2 revenue was $12.896B, down 2% reported; excluding HIS divestiture and FX, revenue grew 2% operationally.

• Adjusted diluted EPS rose 5% to $0.67; the 2017 adjusted EPS guidance midpoint increased $0.02 to $2.57.

Financial highlights

• Q2 net income attributable to Pfizer Inc. was $3.073B, up 50%; diluted EPS was $0.51 versus $0.33.

• Q2 adjusted income increased 3% to $4.063B; adjusted diluted EPS was $0.67 versus $0.64.

• H1 revenue was $25.675B, down 2%; adjusted diluted EPS was $1.36 versus $1.31.

• Reported results benefited from lower asset impairment and legal charges and higher gross margins; higher effective tax and purchase-accounting adjustments were offsets.

Outlook and guidance

• 2017 revenue guidance remained $52.0B–$54.0B; adjusted diluted EPS guidance rose to $2.54–$2.60 from $2.50–$2.60.

• Adjusted other income/deductions guidance changed to ~$200M income from ~$100M deductions, reflecting lower net interest expense and higher royalty and ViiV dividend income.

• Guidance includes $75M of Sangamo-related adjusted R&D expense, a $2.4B revenue impact from generic and biosimilar competition, and $0.2B revenue and $0.01 EPS FX headwinds.

• Productivity initiatives target ~$1.2B in annual savings by 2020, with ~$900M expected costs over three years; Hospira integration savings target $1B annually by 2018.