Shares of Pfizer (NYSE: PFE) jumped as much as 3.2% higher on Tuesday morning before giving up all of the gains and then some. The pharma stock was down by 0.6% as of 12:05 p.m. ET.
These gyrations came after Pfizer announced its fourth-quarter and full-year results before the opening bell. The company reported Q4 revenue of $14.2 billion. Although this was a 41% year-over-year decline, it still topped Wall Street's consensus revenue estimate of $13.3 billion.
Pfizer posted a Q4 loss of nearly $3.4 billion, or $0.60 per share, based on generally accepted accounting principles (GAAP). However, the drugmaker recorded adjusted earnings per share of $0.10, which was well above the analysts' average estimate of an adjusted loss of $0.20 per share.
Why did Pfizer's shares rise and then fall?
Investors initially responded positively to Pfizer's better-than-expected Q4 revenue and earnings. The pleasant surprise came in part from higher sales of its COVID-19 products than anticipated. The analysts' average estimate had been for Comirnaty sales of $4.99 billion in the quarter, according to FactSet. Pfizer reported COVID-19 vaccine sales of $5.36 billion.
However, the enthusiasm didn't last long. The most likely reason why is that Pfizer made no changes to the 2024 guidance it had issued in December. For the year, the company still expects revenue will be between $58.5 billion and $61.5 billion, with total COVID-19 sales for Comirnaty and antiviral therapy Paxlovid of around $8 billion.
Is Pfizer stock a buy after its Q4 update?
There was nothing in Pfizer's Q4 results that would give investors a good reason to buy the stock. I nonetheless think that it's a good pick for income investors, though.
Pfizer's dividend yield at its current share price is above 6.1%. The drugmaker faces headwinds for its COVID-19 franchise, and several of its products will lose exclusivity in the coming years. However, Pfizer's new products, new indications for existing products, and business development deals should enable the company to return to growth despite these challenges, in my view.
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