Pfizer 2016 forecast disappoints
By Ransdell Pierson
(Reuters) - U.S. drugmaker Pfizer Inc (PFE.N: Quote) on Tuesday forecast 2016 revenue and earnings below analysts' estimates, largely because of the strong dollar.
The company's shares fell slightly even though soaring sales of pneumonia vaccine Prevnar and recently approved breast cancer treatment Ibrance led to a stronger-than-expected fourth quarter.
Pfizer, which plans to buy Botox maker Allergan Inc (AGN.N: Quote) in the second half of this year, said it expected earnings of $2.20 to $2.30 per share in 2016. That would not be much different from 2015 and falls short of the analysts' average estimate of $2.36 compiled by Thomson Reuters I/B/E/S.
Pfizer attributed its cautious 2016 outlook largely to the stronger dollar, which hurts the value of sales outside the United States. It forecast 2016 revenue of $49 billion to $51 billion, up from $48.9 billion in 2015 but shy of Wall Street expectations of $52.49 billion.
Tony Scherrer, director of research at Smead Capital Management, said Pfizer shares would eventually benefit from new products and acquisitions.
In the meantime, he said: "If anyone is looking for high and consistent cash flow, and strong profit margins, Pfizer has it."
Pfizer's forecasts do not include the planned $160 billion Allergan purchase.
Pfizer said on Nov. 23 that it would buy Allergan to slash its U.S. tax bill and obtain faster-growing medicines. Continued...