Concise insights on global finance.
Pfizer now expects adjusted earnings to be nearly $21 billion this year, 40% more than what it would have earned without Covid-19 vaccine revenue. That leaves a big bottom-line windfall. Pfizer appears to have fewer side effects and be more effective than some vaccines read more , too, so further guidance increases are easy to imagine.
It could leave the company with a cash windfall, though. Perhaps caution is prudent, as the pandemic won’t be here forever. The company is upping spending on research and development as a result, particularly in the technology that underlies the vaccine. As demand wanes, it will need new products to refocus efforts.
Yet the need to provide boosters means some durable vaccine demand, according to Chief Executive Albert Bourla. That likely leaves enough left over for shareholders as a gesture of appreciation for the upfront funding of the pharmaceutical muscle against Covid. (By Robert Cyran)
On Twitter http://twitter.com/breakingviews
Earlier in Capital Calls:
ConocoPhillips ditches Canada, finally read more
Gates split may hit charities more than investors read more
Ferrari lowers bar for next CEO read more
Lufthansa braces for debt mountain fly-by read more
Telenor’s tricky Myanmar call read more
Reuters Breakingviews is the world's leading source of agenda-setting financial insight. As the Reuters brand for financial commentary, we dissect the big business and economic stories as they break around the world every day. A global team of about 30 correspondents in New York, London, Hong Kong and other major cities provides expert analysis in real time.
Sign up for a free trial of our full service at https://www.breakingviews.com/trial and follow us on Twitter @Breakingviews and at www.breakingviews.com. All opinions expressed are those of the authors.