Pfizer and Merck head in different directions
Health care companies Pfizer Inc. (NYSE:PFE) and Merck & Co., Inc. (NYSE:MRK) kicked things off today by reporting second-quarter results. Pfizer Inc. (NYSE:PFE) has dominated headlines this week for its organizational shakeup as it looks to transition into a streamlined future centered around its high-growth branded-pharmaceuticals core. That didn’t stop the company from laying out a solid earnings beat today, however, which sent shares rising 0.7% to rank among the Dow Jones Industrial Average (Dow Jones Indices:.DJI)’s leaders.
Pfizer Inc. (NYSE:PFE) reported adjusted earnings per share of $0.56, beating bottom-line earnings estimates. However, the company’s sales fell by more than 7% as generic competition for cholesterol-fighting drug Lipitor, which lost patent exclusivity last year, ate away at the drug’s revenue. Despite the drop, Pfizer Inc. (NYSE:PFE) maintained its full-year outlook, and the firm has a number of promising drugs both in the pipeline and recently launched onto the market that should help replace Lipitor’s lost sales.
The optimism is in short supply over at Merck & Co., Inc. (NYSE:MRK). Although Pfizer Inc. (NYSE:PFE)’s rival beat projections with adjusted EPS of $0.84 for the quarter, revenue plunged 11%. It wasn’t just generic competition that hurt Merck this quarter, either: The company’s star diabetes medication, Januvia, was stung by the dollar’s strength, which weakened overseas sales. Januvia picked up just 1% growth for the quarter, although said growth would have come in at 7% if not for the currency issues.
Januvia is Merck & Co., Inc. (NYSE:MRK)’s bread and butter, having brought in more than $5 billion in sales last year, but the drug will need to keep growing as Merck loses sales from former top blockbuster asthma drug Singulair. Merck has some promise in its drug pipeline, but the company will need to step it up if it wants to keep pace with Pfizer Inc. (NYSE:PFE) and other top dogs in the pharmaceutical industry. Today’s muted report pulled down Merck’s shares by 0.5%, even as the company reiterated its full-year outlook.
Merck is hardly today’s biggest loser, however. Verizon Communications Inc. (NYSE:VZ) leads the Dow’s laggards, falling by more than 2%. Verizon recently expressed interest in entering the Canadian market, toying with the idea of purchasing Canada’s Wind Mobile back in June. The Canadians may not love the idea, though: The country’s recently appointed industry minister, James Moore, is under heat from domestic wireless firms and industry sources to hold back potential subsidies that would ease the entry of Verizon Communications Inc. (NYSE:VZ) and other international carriers.
Rumors that Verizon Communications Inc. (NYSE:VZ) and other big telecoms are seeking to enter Canada have sent share prices at the country’s wireless companies plunging. Canadian firm Telus was blocked by the government from purchasing rival domestic company Mobilicity, a firm that Verizon is also considering buying.
The article Pfizer’s Healthy Quarter Can’t Stop the Dow’s Slide originally appeared on Fool.com and is written by Dan Carroll.
Fool contributor Dan Carroll has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned.
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