Pfizer Inc (PFE), the world's largest drug company, is scheduled to report their third quarter results on Tuesday, October 20, 2009. In the last four quarters, the company's actual earnings exceeded the market's consensus significantly. I believe the trend will continue in the third quarter as well.
Analysts' estimates for the quarter ending September 2009 (Q3) range from a low of $0.47 to a high of $0.502, with a consensus of $0.481. For the fiscal quarter ending September 2009, the consensus EPS forecast has increased over the past week from $0.480 to $0.481 (0.21%) and increased over the past month from $0.477 to $0.481 (0.84%). Of the 15 analysts making quarterly forecasts, 4 raised and none lowered their forecast. In the Q2-2009, earnings call, the company increased its 2009 guidance for reported and adjusted diluted earnings per share, as well as raised the lower end of the range on its 2009 revenue guidance. So, there is a slight possibility that the company may in fact surprise the investors with higher earnings announcement for Q3-2009.
In the year ago quarter, the company's revenues showed a sequential downward trend reaching $11,973 million. In Q3-2009, I expect, the trend to continue with the company reporting lower year-over-year sales, as its top-line is burdened by the loss of patent protection for such former blockbusters as Norvasc and Zyrtec. These blockbusters are included in the company's Established Products Unit. The remaining business divisions such as Pharmaceutical units, as well as Animal Health business are expected to have generated revenue growth during Q3-2009.
Recently, Pfizer has bought Wyeth in a deal worth about $67 billion, which will require the drug-maker to take-on new debt of $22.5 billion.
For the fiscal year ending December 2009, the consensus EPS forecast has increased over the past week from $1.974 to $1.976 (0.10%) and increased over the past month from $1.973 to $1.976 (0.15%). Of the 15 analysts making yearly forecasts, 3 raised and none lowered their forecast.
The company's shares closed Friday at $17.77, compared to the 52 week range of $11.62 - $18.48. Pfizer options were actively traded on Friday after JP Morgan analysts upgraded the stock to overweight and gave PFE a $21 price target. Shares gained 13 cents to $17.79 and options volume rose 2X the average daily. 84,000 calls and 47,000 PFE puts traded. October and November calls were the 17 strike were the most actives after some big traders rolled bullish positions from one month to the next and, in doing so, kept bullish positions in Pfizer. These trades suggest that the company could set a new 52 week high soon.
