The pharmaceutical company Pfizer exceeded analysts' expectations in the third quarter of 2024 and raised its annual forecasts for revenue and profit. Earnings per share (EPS) increased to $0.99, compared to $0.930 in the previous year's quarter, while revenue rose by 15% to $88.3 billion, surpassing the expected $86.3 billion.
Despite these positive results, Pfizer's shares responded with disappointment on Tuesday at NASDAQ, losing 1.4% to a price of about 161 billion USD. This price movement reflects the mixed reaction of investors who, on one hand, welcome the improved financial results, but on the other hand, are unsettled by the missed sales forecasts and ongoing criticism from activists.
Albert Bourla, CEO of Pfizer, responded sharply to the criticism from activist investor Starboard Value in a call with analysts. Bourla defended the company's strategic acquisitions, particularly the acquisition of cancer specialist Seagen for 43 billion USD, and emphasized the planned cost reductions of 4 billion USD within a 5.5 billion USD program. "We plan to create significant value for shareholders with our acquisitions," stated Bourla, rejecting Starboard's demand to hold management accountable.
Starboard Value had previously criticized Pfizer's leadership for mismanaging the Covid-19 profits and called for a board committee to ensure the company's value enhancement. In an extensive presentation, Starboard stated that Pfizer had lost at least 20 billion USD in shareholder value due to inefficient spending. Bourla countered that the company had already taken numerous measures to improve efficiency and strengthen scientific leadership, including the appointment of a new Chief Scientific Officer.
Despite the positive quarterly results and the raised annual forecast, Pfizer's long-term challenge remains, as many of their top products will soon expire or face increased competition. Analyst Vamil Divan from Guggenheim noted in a statement that "questions remain about how much weight investors will give to Pfizer's long-term challenges," especially in light of the competition from new AI technologies and growing regulatory requirements.
The latest quarterly figures show that Pfizer can still achieve solid results in a highly competitive environment; however, strategies for long-term value creation need further optimization. While the company raises its sales and profit forecasts, maintaining the balance between short-term performance and sustainable growth remains a key challenge.
