--- title: "Dow 30 Earnings: Pfizer Third Quarter Fiscal 2017" description: dow 30, third-quarter earnings, Pfizer, $0.47 a share, steep decline in restructuring and acquisition-related expenses, revenues advanced 1%, stock traded lower image: https://investor.valueline.com/hubfs/VL%20Blog%20Images/iStock-463594335.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 Third Quarter Fiscal 2017 October 31, 2017 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_20171006_VLIS_PFE_4373_01-79RT6PE130QEKNV92DDM2LII5J&symbol=PFE)) has reported third-quarter earnings of $0.47 a share, versus $0.22 in the comparable period of 2016. The year-over-year improvement was driven primarily by continued reductions in production costs (-8%) and a steep decline in restructuring and acquisition-related expenses (-72%). Decreased SG&A (-2%) and R&D (-1) outlays, along with a 1% uptick in revenues, provided further support to the bottom line. Meantime, adjusted earnings, which exclude one-time gains, charges, and other nonrecurring items, and are more closely followed by Wall Street, came in at $0.67 a share versus $0.61 in 2016. The adjusted tally beat consensus expectations of $0.64 a share due, in part, to better-than-anticipated results in the blockbuster *PREVNAR*vaccine franchise. Management also raised its full-year adjusted earnings guidance to $2.58-$2.62 a share (previously $2.54-$2.60), but PFE stock traded modestly lower on the release. In the September period, worldwide revenues advanced 1% year over year, to $13.17 billion, ending a three-quarter streak of decline. Key highlights included a solid beat in the company's top-grossing product, *PREVNAR* (12% of total revenue), and continued strong momentum in top oncology asset *IBRANCE* (sales +60%). On a segment basis, Pfizer's Innovative Health division, which sells newer, patent-protected drugs, contributed sales of $8.12 billion, representing growth of 11% year over year. In addition to *IBRANCE*, comps benefited from gains in rheumatoid arthritis treatment *XELJANZ* (+48%); blood thinner medication ELIQUIS (+43%); and a 10% uptick in the company's second-highest grossing franchise, *LYRICA* (9% of total revenue). This was partially offset by continued sales erosion in aging blockbusters *VIAGRA* (-31%) and *ENBREL* (-13%), and a 12% decline in Pfizer's Essential Health division, which sells older, mostly off-patent drugs. Management narrowed its 2017 full-year revenue outlook to $52.4 billion-$53.1 billion (previously $52 billion-$54 billion). Looking ahead, Pfizer's core product lineup is set to face some pressure in the coming years. While *PREVNAR* beat last quarter, the vaccine's sales remain in decline due to softening demand for the adult indication. Reductions in *VIAGRA* and *ENBREL* are also likely to persist due to exclusivity losses in major markets, and *LYRICA's* U.S. patent is scheduled to expire in 2018. Given that these four products combined account for more than 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 high-quality Pfizer 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 repurchase 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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