Pfizer issued a bullish profit forecast for 2018 as it said its tax rate would fall from 23 per cent to 17 per cent as a result of US president Donald Trump’s reforms.
The US pharmaceutical company said it expected to generate adjusted earnings of between $2.90 and $3 a share this year, compared with the consensus forecast of $2.78. It expects revenues to be between $53.5 billion and $55.5 billion, compared with the Wall Street expectation of $53.9 billion.
“Our effective tax rate on adjusted income is expected to be approximately 17 per cent in 2018, significantly lower than the approximately 23 per cent that we previously anticipated for full-year 2017, prior to the enactment of tax reform,” said chief financial officer Frank D’Amelio.
Shares in the group fell 1.6 per cent in premarket trading in New York.
Pfizer said it anticipated paying a bill of $15 billion to the US treasury to repatriate cash held overseas, which it expects to spread out over the next eight years.
The company said it would use some of the tax savings to boost investment in the US, and pledged to: invest about $5 billion in capital projects in the US, make a $500 million contribution to its US pension plan in 2018, and allocate about $100 million for a special, one-time bonus to be paid to all non-executive Pfizer staff in the first quarter.
For the fourth quarter, revenues of $13.7 billion were in line with expectations. – Copyright The Financial Times Limited 2018
