Pfizer Inc. (PFE) shares traded lower Friday even as the pharmaceutical group boosted it latest quarterly dividend and said it would buyback another $10 million in company stock in what may be the last corporate act of outgoing CEO Ian Read.
Pfizer said it had approved a 36 cents per share dividend, a 6% increase from the same period last year which will be paid on March 1 and authorized a new, $10 billion share repurchase plan, adding to an existing program of around $4.9 billion, which will be phased in over an unspecified period of time. The first quarter dividend is Pfizer's 321st consecutive shareholder payout by the New York based pharmaceutical group.
"We are confident in the business and focused on maximizing total shareholder return, of which the dividend remains a key component," said Read, who will step down from his role later this month to make room for current Chief Operating Officer Albert Bourla. Read will serve as executive chairman from January 1.
Pfizer shares, however, were marked 2% lower by mid-afternoon in New York, against a 1.7% decline for the Dow Jones Industrial Average
Dow component Pfizer posted adjusted adjusted earnings for the three months ended in September, the group's fiscal first quarter, of 78 cents a share, topping the Street consensus of 75 cents and rising 16.4% from the same period last year. Group revenues, the company said, were pegged at $13.3 billion up 1% from the third quarter in 2017 but just shy of analysts' estimates of $13.55 billion.
Pfizer also said full year sales would come within a range of $53 billion to $55 billion, a figure that is around $2 billion lower at the top end.
However, JPMorgan analysts lowered their rating for the drugmaker last week amid concerns of the loss of exclusivity on one of its key pain treatments.
JPMorgan analyst Chris Schott maintained a $46 price target for Pfizer, but clipped his overall rating to "neutral" from "overweight" as he argued the need for further expansion of the group's product pipeline following the patent expiration of its blockbuster pain treatment Lyrica next year.
Lyrica, which generated around $5 billion in sales for Pfizer last year, was granted a six-month patent exclusivity extension by the U.S. Food & Drug Administration last month, but the branded treatment, known also as pregabalin, will face generic competition from June of next year.
Schott said Pfizer faces another patent cycle risk in 2026/2027, but said he sees "an extended window to address the potential headwinds through internal R&D and bizdev".
Pfizer currently is bringing four new drugs to the market, focusing on breast and lung cancer treatments as well as drug used for patients with newly diagnosed elderly acute myeloid leukemia.
Last month, Pfizer said it plans to boost prices on around 41 of its listed drugs by between 5% and 10%, starting next year, but noted that rebates from insurance companies and pharmacy benefit managers would offset some of the added costs to customers.
The move reverses an earlier decision by Pfizer in July to delay price increases following a Tweet from President Donald Trump that the drugmaker "should be ashamed that they have raised drug prices for no reason."
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