When
Pfizer (NYSE: PFE) releases earnings on the
other side of the sunrise, we'll get a last look at the
company
pre-Wyeth. Here's what you can expect from the
pharmaceutical giant.
What analysts say:
Buy, sell, or waffle? By more than a 3-to-1
margin, buy recommendations outnumber holds, 14 to
four.
Revenue. Analysts are looking for $11.4
billion in revenue, down 6% from the year-ago quarter.
Earnings. The bottom line looks much worse,
with earnings per share (after all those
pesky adjustments) expected to fall from $0.62 last
year to just $0.48 this year.
What management says:
With Lipitor's patent expiration hanging over Pfizer's
head, CEO Jeff Kindler has vowed to make sure that no single
drug makes up more than 10% of Pfizer's revenue. Adding
Wyeth's $22 million in revenue to Pfizer's $46 million seems
to accomplish that, if only by raising the denominator
portion of that fraction. But large acquisitions
haven't worked out so wellfor health-care companies in
the past. Pfizer might have been able to accomplish more with
less cash if it had piecemealed $22 million in revenue
together from a bunch of smaller acquisitions, as
Johnson & Johnson (NYSE: JNJ) and
Abbott Labs (NYSE: ABT) have done, but I
guess management didn't have the patience for it.
What management does:
Operating margins have been inching upward over the
past few quarters, as Pfizer slims down and becomes more
efficient. Nice! Net margins, on the other hand, haven't been
so lucky, being dragged down by restructuring charges, lower
net interest income, and $2.3 billion in
chargesto pay the government for not playing by the
rules.
Margins
3/08
6/08
9/08
12/08
3/09
6/09
Gross
83.7%
83.7%
83.5%
85.1%
85.9%
86.3%
Operating
29.3%
31.1%
31.5%
34.8%
35.8%
36.7%
Net
15.8%
18.5%
21.6%
16.8%
17.0%
16.3%
FCF/Revenue
27.9%
30.2%
28.8%
34.2% Continued... |