The Pfizer logo is seen outside the pharmaceutical company’s manufacturing plant, in Newbridge, Ireland February 10, 2025.
Clodagh Kilcoyne | Reuters
Pfizer on Tuesday expanded its cost-cutting efforts and reported first-quarter profit that topped estimates, whilst the corporate’s sales fell, largely on account of dwindling revenue for its antiviral Covid pill Paxlovid.
The corporate previously said its cost-cutting program would deliver overall net cost savings of roughly $4.5 billion by the tip of 2025. On Tuesday, Pfizer said it now expects additional savings of roughly $1.2 billion, primarily in selling, informational and administrative expenses, by the tip of 2027.
The corporate said that can be driven largely by “enhanced digital enablement,” including automation and artificial intelligence and streamlining business processes.
The expanded cuts also include expected research and development reorganization cost savings of around $500 million by the tip of 2026, the corporate added. Those savings can be reinvested into Pfizer’s product pipeline.
Pfizer has a separate multiyear initiative to slash costs, with the primary phase of the trouble slated to deliver $1.5 billion in savings by the tip of 2027. With the added cuts announced Tuesday, Pfizer now expects to deliver around $7.7 billion in savings by the tip of that yr from the 2 cost-cutting efforts.
The cuts aim to assist the pharmaceutical giant get well from the rapid decline of its Covid business and stock price over the previous few years, and seem like paying off.
Here’s what the corporate reported for the first quarter compared with what Wall Street was expecting, based on a survey of analysts by LSEG:
- Earnings per share: 92 cents adjusted vs. 66 cents expected
- Revenue: $13.72 billion vs. $13.91 billion expected
‘Volatile external environment’
The outcomes come as drugmakers brace for President Donald Trump’s planned tariffs on pharmaceuticals imported into the U.S. – his administration’s bid to spice up U.S. manufacturing of medicines.
Unlike other firms grappling with evolving trade policy, Pfizer didn’t revise its outlook.
The corporate maintained its full-year 2025 outlook, forecasting sales of $61 billion to $64 billion, with an analogous performance from its Covid products as seen in 2024, nevertheless Pfizer noted in its earnings release that the guidance “doesn’t currently include any potential impact related to future tariffs and trade policy changes, which we’re unable to predict right now.”
But on the earnings call on Tuesday, Pfizer executives said the guidance does reflect $150 million in costs from Trump’s existing tariffs.
“Included in our guidance that we didn’t really talk about is there are some tariffs in place today,” Pfizer CFO Dave Denton said on the decision.
“We’re contemplating that inside our guidance range and we proceed to again trend to the highest end of our guidance range even with those costs to be incurred this yr,” he said.
On the decision, Pfizer CEO Albert Bourla said the corporate established a team to research a variety of potential outcomes and develop strategies to assist mitigate the potential impact of tariffs on its business within the short and long run. That team is managing current inventory levels in certain jurisdictions and leveraging Pfizer’s domestic manufacturing footprint, amongst other efforts.
“Should we be impacted by further tariffs in the longer term, we are going to assess the impact of the policies enacted and supply information at the suitable time,” Bourla said.
He added that uncertainty around Trump’s pharmaceutical tariffs is deterring the corporate from further investing in U.S. manufacturing and research and development.
Pfizer still expects that changes to the Medicare program resulting from the Inflation Reduction Act will hurt sales by $1 billion, dampening growth by roughly 1.6% compared with 2024.
Stripping out one-time items, the corporate expects 2025 earnings to be within the range of $2.80 to $3 a share.
“With the underlying strength of our business, we imagine we may be agile in navigating an uncertain and volatile external environment,” Bourla said in a release.
For the primary quarter, the corporate booked net income of $2.97 billion, or 52 cents per share. That compares with net income of $3.12 billion, or 55 cents per share, in the course of the same period a yr ago.
Excluding certain items, including restructuring charges and costs related to intangible assets, the corporate posted earnings per share of 92 cents for the quarter.
Pfizer reported revenue of $13.72 billion for the primary quarter, down 8% from the identical period a yr ago.
Covid sales
The corporate said the decrease in sales was primarily driven by a decline in revenue for Paxlovid, which posted $491 million in sales in the course of the first quarter, down 76% from the identical period a yr ago, partially on account of lower Covid infections worldwide and reduced international government purchases of the drug.
The drop in sales also reflects a lift Pfizer got in the primary quarter of 2024 from a final adjustment related to a previously recorded revenue reversal for Paxlovid.
Analysts had expected Paxlovid to generate $769.7 million in sales for the primary quarter, in line with StreetAccount estimates.
Meanwhile, the corporate’s Covid shot, Comirnaty, booked $565 million in revenue, up 60% from the identical period a yr ago. That is above the $352 million that analysts were expecting, in line with StreetAccount.
The outcomes come as shot makers like Pfizer face uncertainty over immunization policy and regulation under Robert F. Kennedy Jr., a distinguished vaccine skeptic who now oversees the nation’s federal health agencies.
As secretary of the Department of Health and Human Services, Kennedy has pursued a sweeping overhaul of various agencies, cutting staff, consolidating or eliminating offices and taking actions that might ultimately undermine vaccines.
