Healthcare Q4: Eli Lilly Beats, Pfizer Misses

Healthcare stocks were under pressure Tuesday morning after two notable industry titans, Pfizer Inc. PFE and Eli Lilly and Co LLY, reported their quarterly results.

Pfizer

• Shares of Pfizer were trading lower by around 1.4 percent at $30.88.
• Pfizer earned $0.47 per share in the fourth quarter on revenue of $13.6 billion; Wall Street analysts were expecting the company to earn $0.50 per share on revenue of $13.63 billion.
• Revenue for the quarter fell 1 percent and was impacted by fewer selling days in the U.S. and international.
• By segment, Innovative Health revenue rose 1 percent from a year ago to $7.726 billion; Essential Health revenue fell 8 percent to $5.9 billion.
• Pfizer, citing the loss of exclusive sales rights, guided its fiscal 2017 earnings to a range of $2.50 to $2.67 on revenue of $52 billion to $54 billion; Wall Street analysts were expecting the company to earn $2.57 per share in the full fiscal year on revenue of $54.03 billion.

CEO Ian Read stated, "I was pleased with the company's overall performance during 2016 and believe both of our businesses executed well despite a challenging operating environment. We generated attractive operational revenue and earnings growth driven by our major products within both the Innovative Health and Essential Health businesses. In addition to strong business performance, we allocated our shareholders' capital to a variety of value-creating initiatives that included company and product portfolio acquisitions, share repurchases, an increase in our dividend and ongoing funding for our R&D and commercial organizations."

Eli Lilly

• Shares of Eli Lilly were trading higher by 0.47 percent at $75.05 after intially trading in the red.
• Eli Lilly earned $0.95 per share on revenue of $5.761 billion; Wall Street analysts were expecting the company to earn $0.98 per share on revenue of $5.55 billion.
• Net income rose 61 percent from a year ago to $771.8 million due to higher operating income and partially offset by a higher effective tax rate.
• Total revenue for the quarter rose 7 percent year-over-year; Revenue in the U.S. rose 14 percent from a year ago to $3.223 billion, driven mostly by increased volumes for Trulicity, Humalog, Taltz, Jardiance, Humulin and companion animal products.
• Revenue outside of the U.S. rose 1 percent to $2.537 billion due to lower realized prices and volume from the loss of exclusivity for various products in several countries.

"Newly launched products - including Trulicity, Cyramza, Jardiance and Taltz - led Lilly's volume-driven growth in 2016. Pipeline progress also continued with approvals of new products and new indications for existing products in our core therapeutic areas of diabetes, oncology and immunology," said David A. Ricks, Lilly's president and CEO. "We expect this momentum to continue in 2017 and remain focused on launching new products, improving productivity and advancing our pipeline as we work to bring life-changing medicines to patients."

Healthcare Sector

Here is a look at how the healthcare exchange traded fund, the Health Care SPDR (ETF) XLV has performed as of late.

• Shares closed on November 7, 2016 - the last trading day before the U.S. election at $68.18.
• Shares closed on November 8, 2016 - the day of the U.S. election at $68.37.
• Shares closed on November 9, 2016 - the first day after Trump won the election at $70.78.
• Shares closed on Monday at $69.41; The stock is higher by 4.42 percent over the past year.