Pfizer Q1 Earnings: EPS Jumps 12% as Cost Savings Exceed Targets

Rhea-AI Summary

Pfizer reported solid Q1 2025 financial results with revenues of $13.7 billion, showing an 8% decrease from Q1 2024. The company achieved Adjusted Diluted EPS of $0.92, marking a 12% increase year-over-year.

Key highlights include:

• On track to exceed $4.5 billion in net cost savings by end of 2025
• Additional expected savings of $1.2 billion through 2027
• R&D reorganization to deliver $500 million in savings by 2026
• Manufacturing optimization to save $1.5 billion by 2027

The company reaffirmed its 2025 guidance with expected revenues of $61.0 to $64.0 billion and Adjusted Diluted EPS of $2.80 to $3.00. Notable product performance included growth in Vyndaqel family (+33%) and Comirnaty (+62%), while Paxlovid saw a 75% decline. The company maintained strong capital allocation, including $2.4 billion in cash dividends to shareholders.

Positive

• Q1 2025 Adjusted EPS of $0.92, up 12% YoY
• Adjusted Income increased 12% to $5.2B in Q1
• On track to exceed $4.5B net cost savings target by end of 2025
• Additional $1.2B cost savings expected through 2027
• Vyndaqel family revenue up 33% operationally
• Comirnaty revenue up 62% operationally
• Padcev revenue up 25% operationally
• Successfully reduced gross leverage below target
• Favorable tax rate due to global tax resolutions

Negative

• Total revenues declined 8% to $13.7B in Q1
• Paxlovid revenue dropped 75% ($1.5B decrease)
• Reported net income decreased 5% to $3.0B
• Eliquis revenue down 4% operationally
• Xeljanz revenue declined 31% operationally
• Ibrance revenue decreased 6% operationally
• No share repurchases completed in 2025
• IRA Medicare Part D Redesign causing lower net prices across multiple products

Insights

Pharmaceutical Financial Analyst

Pfizer delivers solid Q1 with 12% adjusted EPS growth despite revenue decline; cost-cutting program expanded while maintaining 2025 guidance.

Pfizer's Q1 2025 results demonstrate effective financial management amid revenue headwinds. While revenue declined 8% to $13.7 billion, adjusted EPS increased 12% to $0.92, substantially outpacing the revenue trend. The company is trending toward the upper end of its $2.80-$3.00 adjusted EPS guidance range for 2025, signaling management confidence despite external pressures.

The aggressive cost optimization strategy is yielding results and expanding in scope. Beyond the $4.5 billion in savings targeted by end-2025, Pfizer has now announced additional $1.2 billion in SI&A savings by 2027, $500 million from R&D reorganization by 2026, and $1.5 billion from manufacturing optimization by 2027. This disciplined approach is effectively offsetting revenue challenges from Medicare Part D redesign impacts.

Product performance shows divergent patterns. The 75% operational decline in Paxlovid significantly impacted overall revenue, while Medicare Part D redesign pressured pricing for Eliquis (-4%), Xeljanz (-31%), and Ibrance (-6%). However, strong performances from Vyndaqel family (+33%), Comirnaty (+62%), Padcev (+25%), and Nurtec (+40%) helped counterbalance these declines.

The effective tax rate on adjusted income dropped substantially to 7.8% from 16.6% year-over-year, providing another earnings boost. Notably, Pfizer has already achieved its deleveraging target ahead of schedule, creating financial flexibility for potential business development or future share repurchases.

Pharmaceutical Clinical Development Expert

Pfizer strengthens portfolio with key regulatory wins and positive clinical data while reorganizing R&D for greater efficiency and pipeline focus.

Pfizer's Q1 update reveals meaningful progress across its regulatory and clinical development fronts. The European Commission's expanded authorization for Abrysvo to include adults 18-59 years represents a significant market opportunity in RSV prevention. This regulatory win is complemented by the CDC's ACIP vote recommending RSV vaccination for high-risk adults aged 50-59, down from the previous 60+ recommendation—effectively expanding the eligible population.

The FDA approval for Adcetris in combination with lenalidomide and rituximab for relapsed/refractory large B-cell lymphoma provides a new treatment option for patients who aren't candidates for auto-HSCT or CAR-T therapy. This addresses an important treatment gap in the LBCL landscape.

Clinical data from the Padcev plus Keytruda combination in first-line metastatic urothelial cancer showed sustained overall survival and progression-free survival benefits at extended 29.1-month median follow-up, strengthening its competitive position in this indication. Similarly, Talzenna demonstrated statistically significant and clinically meaningful overall survival improvement in combination with Xtandi in metastatic castration-resistant prostate cancer.

The announced R&D reorganization targeting $500 million in savings by 2026 comes with the crucial specification that these savings will be reinvested in the pipeline. This suggests a strategic reprioritization rather than diminished research commitment—focusing resources on programs with highest potential return. This aligns with management's statements about strengthening the R&D organization while improving productivity.

Pfizer Reports $13.7 Billion in Q1 2025 Revenue, Reaffirms Full-Year Guidance Despite Medicare Headwinds

Pfizer Inc. (NYSE: PFE) reported first-quarter 2025 financial results on April 29, showing solid earnings performance despite revenue challenges. The pharmaceutical giant posted $13.7 billion in revenue for the quarter, down 8% from the same period last year, while reaffirming its full-year 2025 guidance.

According to the company's release, adjusted diluted earnings per share (EPS) reached $0.92, representing a 12% increase compared to $0.82 in the first quarter of 2024. Reported diluted EPS was $0.52, down 5% from $0.55 in the prior-year quarter. The company highlighted its ability to navigate a "dynamic environment" while making progress on strengthening its R&D organization and cost savings initiatives.

"We continued to execute with focus and discipline against our strategic priorities, including strengthening our R&D organization and driving improved productivity," said Dr. Albert Bourla, Chairman and CEO of Pfizer, in the release. "With the underlying strength of our business, we believe we can be agile in navigating an uncertain and volatile external environment."

Chief Financial Officer David Denton noted that the company is "currently trending towards the upper end" of its 2025 adjusted diluted EPS guidance range of $2.80 to $3.00. He attributed the solid first-quarter performance to "continued focus on commercial execution amid U.S. Medicare Part D headwinds," adding that "operational efficiency and financial discipline is driving strong results to our bottom line."

Revenue Performance by Key Products

The 8% revenue decline (6% operational decrease) was primarily driven by lower Paxlovid sales, according to the release. However, several products showed strong growth:

• The Vyndaqel family (Vyndaqel, Vyndamax, Vynmac) saw 33% operational growth globally, driven by strong demand and increased patient diagnosis in the U.S. and international markets
• Comirnaty revenues increased 62% operationally, reflecting higher U.S. revenues from lower expected returns and higher market share
• Padcev showed 25% operational growth, primarily from increased market share in first-line metastatic urothelial cancer
• Nurtec ODT/Vydura grew 40% operationally due to strong U.S. demand and favorable channel mix
• Lorbrena increased 39% operationally, driven by increased patient share in first-line ALK-positive metastatic non-small cell lung cancer

These gains were more than offset by declines in several key products:

• Paxlovid revenues fell 75% operationally, or $1.5 billion, primarily due to the non-recurrence of a $771 million favorable adjustment recorded in Q1 2024, lower COVID-19 infections, and reduced international government purchases
• Eliquis revenues declined 4% operationally, reflecting lower net price in the U.S. due to higher manufacturer discounts resulting from the Inflation Reduction Act Medicare Part D Redesign
• Xeljanz revenues decreased 31% operationally, mostly due to lower U.S. net price from unfavorable channel mix changes and higher Medicare Part D discounts
• Ibrance revenues dropped 6% operationally, affected by generic competition in certain international markets and lower U.S. pricing

Cost Savings Initiatives Expanded

Pfizer reported it is on track to exceed its net cost savings targets, with approximately $4.5 billion in savings expected by the end of 2025 from its ongoing cost realignment program. The company also announced additional productivity initiatives:

• Additional anticipated net cost savings of approximately $1.2 billion, primarily in Selling, Informational & Administrative (SI&A) expenses by the end of 2027 through digital enablement and process simplification
• Expected R&D re-organization cost savings of approximately $500 million by the end of 2026, with savings to be reinvested in the pipeline
• Manufacturing optimization program on track to deliver approximately $1.5 billion in net cost savings by the end of 2027, with initial savings anticipated in late 2025

2025 Financial Guidance Reaffirmed

The company reaffirmed all components of its full-year 2025 financial guidance, including:

• Revenues of $61.0 to $64.0 billion
• Adjusted diluted EPS of $2.80 to $3.00
• Adjusted SI&A expenses of $13.3 to $14.3 billion
• Adjusted R&D expenses of $10.7 to $11.7 billion
• Effective tax rate on adjusted income of approximately 15.0%

The company noted its guidance does not include any potential impact from future tariffs and trade policy changes, which it is unable to predict at this time.

Capital Allocation

During the first quarter of 2025, Pfizer reported deploying capital in several ways:

• $2.2 billion invested in internal research and development projects
• Approximately $90 million invested in business development transactions
• $2.4 billion returned to shareholders through cash dividends ($0.43 per share)

The company stated it has not completed any share repurchases in 2025 to date, with $3.3 billion remaining in its share repurchase authorization as of April 29. The current financial guidance does not anticipate any share repurchases in 2025.

According to the release, Pfizer has "actively de-levered" and is now below its previously stated gross leverage target. The company expects to continue deleveraging "in a prudent manner" while maintaining flexibility for potential business development transactions and possible future capital returns to shareholders.

Recent Product Developments

The release highlighted several recent product developments since early February 2025:

• Abrysvo: Received European Commission authorization to extend indication to include prevention of RSV lower respiratory tract disease in individuals 18-59 years of age
• Adcetris: FDA approved its use in combination with lenalidomide and a rituximab product for treatment of relapsed or refractory large B-cell lymphoma after two or more lines of therapy
• Padcev: Presented additional positive Phase 3 results showing sustained overall survival and progression-free survival benefits
• Talzenna: Announced positive overall survival results from the Phase 3 TALAPRO-2 study in patients with metastatic castration-resistant prostate cancer

This article is based solely on information provided in Pfizer's press release dated April 29, 2025. The content is for informational purposes only and does not constitute financial, investment, legal, or tax advice. Stock Titan and its writers make no representations as to the accuracy, completeness, or timeliness of the information. Investors should conduct their own due diligence before making any investment decisions.

Source: Pfizer Inc.

FAQ

What are Pfizer's (PFE) Q1 2025 earnings and revenue results?

Pfizer reported Q1 2025 revenues of $13.7 billion, down 8% from Q1 2024, with adjusted earnings per share of $0.92, up 12% from $0.82 in Q1 2024. The company maintained its 2025 full-year guidance of $61.0-$64.0 billion in revenue.

How much cost savings is Pfizer (PFE) targeting through 2027?

Pfizer expects $4.5 billion in net cost savings by end of 2025, with additional savings of $1.2 billion by 2027 through digital enablement and process simplification. The company also targets $500 million in R&D savings by 2026 and $1.5 billion from manufacturing optimization by 2027.

What caused Pfizer's (PFE) Paxlovid revenue decline in Q1 2025?

Paxlovid revenues declined by $1.5 billion (75%) due to lower COVID-19 infections across markets, reduced international government purchases, and the non-recurrence of a $771 million favorable adjustment from Q1 2024.

What is Pfizer's (PFE) dividend payment for Q1 2025?

Pfizer returned $2.4 billion to shareholders through cash dividends in Q1 2025, paying $0.43 per share of common stock. No share repurchases were completed during this period.

How is Medicare Part D redesign affecting Pfizer's (PFE) drug revenues?

The Inflation Reduction Act Medicare Part D Redesign negatively impacted revenues for several key drugs including Eliquis, Xeljanz, Ibrance, and the Vyndaqel family through higher manufacturer discounts affecting net pricing.