Dive Brief:
- For the first quarter of 2015, Pfizer, Merck, and Bristol-Myers Squibb reported higher-than-expected revenues. But overall net profits were negatively affected by the impact of the strong dollar.
- BMS's Q1 profits were up 6% mainly due to the effect of their cancer immunotherapies, Yervoy and Opdivo.
- Pfizer's net profit increased from $2.33 billion in Q1 2014, to $2.38 billion in Q1 2015. However, with 60% of its business coming from sales outside of the U.S., the company has cut its full-year expectations to $44 to $46 billion, from $44.5 to $46.5 billion.
Dive Insight:
For all three companies, having a strong product franchise bolstered gross revenues and net earnings, despite external factors, such as currency changes. For Merck, the impact of increased Januvia sales were uplifting, while it is expecting even better sales going forward based on a positive report showing that Januvia is not associated with increased CVD risk. In addition, Merck expects strong sales based on the strength of Singulair and Keytruda.
For Pfizer, its vaccines and cancer medications were a source of strength, but the this company felt the impact of the strong dollar more than most. During the first quarter, the dollar gained 9% against several major currencies, after a year-long gain of 13% in 2014. Fortunately, Pfizer has the muscle to continue to grow profits despite strong currency shifts, but expectations have been lowered.
Now that currency is such an important factor, companies are focusing on reporting sales and earnings both with and without the impact of currency-related factors.