Although Pfizer missed third quarter revenue expectations, gross margins improved 1.12 percentage points YoY to 82.77%, helping the company beat earnings estimates
(OPENPRESS) Pfizer Inc. (PFE), the largest drug maker in the US by sales, reported earnings for 3QFY13 on October 29. Revenues missed analyst expectations by $0.1 billion and fell to $12.6 billion. Revenues declined 9.5% year-over-year (YoY), due to increased competition from generic medicines, and because of a stronger dollar. The company lowered its revenue projection for FY13 to $50.8-51.8 billion.
Adjusted earnings per share increased 9.4% YoY to 58 cents, beating analyst estimates by two cents. The EPS beat was driven by cost cutting measures and a lower tax rate. However, expectations for diluted per-share earnings were narrowed and lowered from $3.07-3.22 to $3.05-3.15 for FY13.
Pfizer has repurchased shares worth $13.1 billion year-to-date (YTD), and the company expects to return a total $20 billion to its shareholders through share buybacks and dividends in 2013.
Segments
The company's largest business segment by revenues, Specialty Care, saw revenues decline 2% YoY to $3.3 billion. The biggest setback was witnessed in the Primary Care business, which dropped 10% YoY to $3.2 billion. The combined decline in these two segments was responsible for most of the company's fall in revenues.
The Oncology division had the highest operational growth, at 26%, mainly due to a 17% increase in sales of Inlyta, a treatment for kidney cancer, and a 9% increase in sales of Xalkori, a treatment for lung cancer. The sales of Lyrica, which is used to treat muscle pain, and Celebrex, a treatment for arthritis, grew 11% and 13% respectively to $407 million combined.
Emerging markets, which had a 17% share of total revenues this quarter, saw a 5% YoY increase in volumes. Unsurprisingly, sales growth in China contributed the most to the total growth in emerging markets. Looking at this trend, the company expects mid-single digit operational revenue growth in emerging markets for the whole of 2013.Outlook.
Exxon Mobil Corporation (XOM) more than made up for the disappointing results in the previous quarter when it beat estimates and announced $112.4 billion in revenues for 3QFY13. This was a significant turnaround for the company which had recently announced its worst ever results since 2010.
Earnings from its Upstream segment noticeably improved on both a year-over-year (YoY) and quarter-over-quarter (QoQ) basis. The segment performed better because global oil pricing benchmarks like the price of Brent crude oil increased during 3QFY12. Exxon is also increasing its exposure in liquid production to capitalize on high crude oil prices and upstream volumes also increased 1.5% YoY.
The decline in refining and marketing margins is a cause for concern and hit earnings but the possible impact was partially offset by an increase in volumes in 3QFY13. The Dartmouth refinery, which is being converted into a marine terminal, remained functional over the quarter, which also contributed to the higher refining volumes.
Exxon's Chemicals business was the highest growing segment in the previous year. Margins as well as volumes have improved compared to the previous quarter and the previous year's same quarter.
Management also stated that in its earnings call that capex for FY13 was in accordance with guidance. The company's cash balance over the quarter rose by $700 million to $5.7 billion. This indicates Exxon's ability to keep on paying dividends and also continue its share buyback program. Dividend paid out by Exxon this quarter was $2.8 billion and the company also bought back 34 million shares worth $3 billion.
