Pfizer has announced a cut to its annual sales forecast - we're talking a drop of $9 billion USD.
👉 Background: Pfizer is the US-based pharmaceutical giant that we all became familiar with during COVID. And, their COVID vaccines have been their largest selling product to date, generating over $37 billion USD last year alone.
👉 What happened: Now, Pfizer has announced a cut to its annual sales forecast - we're talking a drop of $9 billion USD, with demand for COVID shots dwindling.
👉 What else: Interestingly, investors were so relieved with this announcement that Pfizer's share price shot up 5.6%.
💡In periods of economic uncertainty, announcing a cut to earnings can be like ripping off the bandaid. Sometimes breaking this news can be cause for concern, but in other cases it can set the stage for a healthier financial outlook.
💡Investors make decisions based on future guidance from a company. But when a company (like Pfizer) has a once-off revenue boom, it can be hard for investors to get a handle on how the company will track moving forward.
💡While forecasting a drop in sales is usually a red flag, in this case it's seen as an opportunity for investors to reset their expectations and focus on how the company plans to grow post-pandemic.
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