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What’s happening: Shares of Pfizer edged lower on Tuesday, after the company released its results for the second quarter.
What happened: The US drugmaker reported weaker-than-expected sales for the quarter amid lower demand for its covid-19 products.
However, Pfizer topped earnings expectations and said it was considering a cost-cutting program.
How were the results: The New York-based company reported a sharp decline in sales and earnings for the three months ended June.
Why it matters: The earnings of US drugmakers have been hit by a sharp decline in demand for covid-19 products. Pfizer said it will announce a cost-cutting program in case the underperformance continues for its covid-19 vaccine and antiviral treatment in the upcoming months.
The company is waiting for greater clarity later in the year, as covid-19 infection rates increase during autumn and the US decides whether to bow out of vaccine distributions and transfer it to the commercial market.
Excluding contributions from the Comirnaty and Paxlovid covid-19 products, the company’s revenues grew by 5% during the quarter. While sales of Comirnaty fell by 83% to $1.49 billion, Paxlovid’s sales were down 98% to $143 million in the quarter.
Management reduced the higher end of their revenue guidance for fiscal 2023, from $67-$71 billion to $67-$70 billion. The company projected non-covid operational revenue growth of 6%-8% in the year.
Pfizer also reaffirmed its adjusted earnings forecast of $3.25-$3.45 per share, versus market estimates of $3.32 per share.
How shares responded: Pfizer’s shares fell 1.3% to close at $35.61 on Tuesday, following the release of quarterly earnings. The company’s stock has lost around 20% over the past six months.
What to watch: Investors will watch the spread of covid-19 during autumn. Markets will also continue monitoring new product launches by Pfizer.
Context: The GBP/USD forex pair declined to a three-week low on Tuesday, following the release of economic data.
Details: The British currency has added about 6% this year, with the Bank of England continuing to raise interest rates to combat high inflation.
The sterling surged to a 15-month high of $1.314 in mid-July, but pared gains after UK’s inflation rate for June came in lower than projected.
Markets widely expect the Bank of England to hike interest rates by 25 basis points on Thursday, while there are growing speculations of an increase of 50 bps.
On the economic data front, the S&P Global/CIPS manufacturing PMI for the UK fell to 45.3 in July, from 46.5 in June, the weakest reading so far this year. The Nationwide House Price Index fell by 3.8% year-over-year in July, after a 3.5% decline recorded in June.
Strength in the US dollar on Tuesday also exerted pressure on the pound. The US dollar index, which measures the greenback’s performance versus a basket of major peers, added around 0.4% at 102.30 on Tuesday.
The GBP/USD forex pair declined around 0.5% to 1.277 on Tuesday, reaching the weakest level since July 10.
What are expectations: Traders await the Bank of England’s interest rate decision on Thursday. The central bank had raised its interest rate by 50 basis points to 5.0% at its June meeting, surprising markets, which had expected a smaller rate hike.
Other Markets: US trading closed mixed on Tuesday, with the S&P 500 and Nasdaq 100 down by 0.27% and 0.25%, respectively, and the Dow Jones index up by 0.20%.
Russia’s air defences shot down several drones targeting Moscow. The news sent the safe-haven US dollar index slightly lower this morning.
Thailand’s S&P Global manufacturing PMI fell to 50.7 in July, from 53.2 in the previous month, exerting pressure on the THB/USD forex pair.
South Korea’s consumer price index rose 2.3% year-over-year in July, following a 2.7% increase in June, which sent the KRW/USD pair lower in forex trading this morning.
Australia’s Ai Group Industry Index declined by 2.8 points to a reading of -14.7 in July. The index representing the 15th straight month of contraction in business activity exerted pressure on the AUD/USD forex pair.
New Zealand’s unemployment rate rose to 3.6% in the second quarter. This was the highest since the June quarter of 2021 and sent the NZD/USD pair lower in forex trading this morning.
Spain’s unemployment change and number of foreign tourist arrivals, Brazil’s IPC-Fipe inflation, US MBA mortgage applications, ADP employment change, gasoline stocks, crude oil inventories, distillate inventories and total vehicle sales, Singapore’s manufacturing PMI, Russia’s unemployment rate, business confidence, real wages, retail sales and GDP, Argentina’s tax revenue, as well as Turkey’s total vehicle sales and balance of trade.
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