Pfizer Results May Temper Efforts for Shakeup Demanded by Activist Investor

Key Takeaways

• Pfizer beat third-quarter profit and sales forecasts and raised its guidance on strong sales of its COVID-19 treatment.
• However, shares declined as the results may have put a damper on possible changes to the company demanded by activist investor Starboard Value.
• CEO Albert Bourla expressed confidence in the way Pfizer is executing its strategy.

Shares of Pfizer (PFE) fell Tuesday as a strong earnings report is seen as likely to limit activist investor Starboard Value from driving major changes at the drugmaker. 

Pfizer reported third-quarter adjusted earnings per share (EPS) of $1.06, with revenue soaring 31% year-over-year to $17.70 billion. Both were well above analysts' estimates compiled by Visible Alpha.

The company got a boost from rising demand for its Paxlovid treatment for COVID-19, which saw sales soar to $2.70 billion after bringing in just $202 million a year ago.

Pfizer raised its outlook for full-year adjusted EPS to $2.75 to $2.95, and revenue to $61.0 billion to $64.0 billion. Previously it had anticipated adjusted EPS of $2.45 to $2.65 and revenue of $59.5 billion to $62.5 billion.

Starboard Has Pressed for Change

Chief Executive Officer (CEO) Dr. Albert Bourla and the board have been under fire from Starboard, which has taken what's reported to be a $1 billion stake in the company and called for changes. At a recent investor conference, Starboard CEO Jeffrey Smith is said to have spelled out where the pharmaceutical firm has gone wrong, but didn't give details on what the hedge fund felt was needed to be done.

In the quarterly report, Bourla said he is confident "that we will deliver on our financial commitments in 2024 and that we are well positioned to continue advancing scientific breakthroughs meaningful to our patients and our company, as well as creating long-term shareholder value, in the years to come."

Pfizer shares, which had been essentially flat on the year through Monday's close, were down 1.4% to $28.45 in recent trading.

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