Shares of Pfizer, the healthcare giant, fell 3.5% to $31.00 in after-hours trading as the company significantly reduced its outlook for the year. The revision is primarily driven by expectations of lower Covid-19 related revenue.
Unexpected Drop in Sales
Pfizer now predicts an unexpected $9 billion decline in sales from its highly successful Covid-19 vaccine and anti-viral treatment, Paxlovid. The company disclosed that it has received approximately 7.9 returns of Paxlovid treatment courses from the U.S. government.
Revised Revenue and Earnings Forecasts
In light of the revised expectations, Pfizer is now guiding for revenue of $58 billion to $61 billion for 2023, a notable decrease from the prior forecast of $67 billion to $70 billion. Similarly, the company anticipates full-year adjusted earnings per share of $1.45 to $1.65, down from the previous range of $3.25 to $3.45.
Cost-saving Measures
To counterbalance the projected loss in revenue, Pfizer has set a target of achieving savings of at least $3.5 billion by the end of 2024. This will involve a restructuring plan that includes workforce reductions and implementation costs totaling $3 billion.
Overall, Pfizer is facing a challenging outlook for 2023 due to the impact of lower Covid-19 revenue. While the company is taking steps to mitigate the financial impact, the road ahead may still present obstacles.
