--- title: "Dow 30 Earnings: Pfizer Fourth Quarter Fiscal 2017" description: Dow 30, fourth-quarter earnings, Pfizer, earnings of $2.02 a share vs $0.13 last year, $11.3 billion gain from change to U.S. tax law, modest top-line advance image: https://investor.valueline.com/hubfs/social-suggested-images/iStock-463594335-4.jpg --- [![The Value Line Blog](https://investor.valueline.com/hubfs/VL%20Blog%20Images/vl_blog_header.png)](https://investor.valueline.com/blog) [Stock Highlights](https://investor.valueline.com/blog/topic/stock-highlights) # Dow 30 Earnings: Pfizer Fourth Quarter Fiscal 2017 January 30, 2018 New York-based drugmaker and Dow-30 component **Pfizer** ([PFE ](https://research.valueline.com/research#sec=company&sym=PFE)– [Free Pfizer Stock Report](https://research.valueline.com/api/report?documentID=2185-VL_20180105_VLIS_PFE_4373_01-62PLGKBA5573UFEEUMTLIG7V5U&symbol=PFE)) reported fourth-quarter earnings of $2.02 a share, versus $0.13 in the comparable period of 2016. The sharp year-over-year increase was driven primarily by an $11.3 billion gain from the recently passed U.S. tax legislation. A modest top-line advance, lower R&D expenses, and reduced restructuring charges further supported the surge in quarterly profits. Meantime, adjusted earnings, which exclude one-time gains, charges, and other nonrecurring items, and are more closely followed by Wall Street, came in at $0.62 a share versus $0.47 in 2016. The adjusted tally beat consensus expectations of $0.56 a share thanks to stronger demand in the blockbuster PREVNAR vaccine franchise and for rheumatoid arthritis drug XELJANZ. Despite the solid showing, shares of PFE were trading a few percentage points lower in the morning session. In the December period, worldwide revenues advanced 1% year over year, to $13.7 billion. The gain was highlighted by better-than-expected growth in the company's top-grossing product PREVNAR (+8%), as strength in emerging markets more than offset continued deceleration in the United States. Pfizer's #2-seller LYRICA (+7%) and top oncology asset IBRANCE (+11%) also delivered healthy growth, though the latter came up a bit light versus consensus expectations. Strong momentum in rheumatoid arthritis treatment XELJANZ (+47%) and blood thinner medication ELIQUIS (+46%) provided further support, which helped to mitigate continued generic erosion in aging blockbusters VIAGRA (-61%) and ENBREL (-10%). For full-year 2018, management is targeting adjusted earnings of $2.90-$3.00 a share on revenues of $53.5 billion-$55.5 billion. The guidance includes a full-year contribution from the consumer healthcare business, which Pfizer plans to divest or spin-off later in 2018, and an adjusted effective tax rate of 17%, a direct benefit from the new tax law. In addition, management anticipates a repatriation tax liability of $15 billion over eight years as a result of the passage of the Tax Cuts and Jobs Act. While the tax law has brightened Pfizer's 2018 prospects, the company will still be facing some pressure within its core product lineup. PREVNAR sales rebounded nicely in the second half of 2017, but a saturated U.S. market remains a key overhang going forward. LYRICA also performed well in the back half, but its patent is scheduled to expire later this year, which should lead to some sales erosion. Continued declines in VIAGRA and ENBREL are expected to take a toll, as well. Given that these four products combined account for roughly a quarter of Pfizer's total revenue, further development of the new product cycle and pipeline will be imperative. We wouldn't be surprised if management turned to M&A as another avenue to reignite growth. All told, we continue to view Pfizer's stock as an attractive core holding within the large pharma space. The company has strong finances, high-grade fundamentals, and an impressive track record. An above-average dividend yield and expectations for continued stock repurchases should enhance shareholder value. **About The Company:**[Pfizer](http://www.valueline.com/WorkArea/linkit.aspx?LinkIdentifier=id&ItemID=9375) is a major producer of pharmaceuticals. The company is engaged in discovering, developing, and manufacturing of healthcare products. Important product names include LYRICA (nerve and muscle pain); PREVNAR (vaccine); ENBREL (arthritis, psoriasis, and more); IBRANCE (advanced breast cancer) and CELEBREX (osteoarthritis, rheumatoid arthritis). The company acquired injectable drugmaker Hospira in 2015 and medical devices producer Medivation in 2016. — Michael Ratty At the time of this article’s writing, the author did not have positions in any of the companies mentioned. 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