PFE Shares Lower on Bleak Earnings Report – May 5, 2014

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PFE Shares Lower on Bleak Earnings Report - May 5, 2014

PFE Shares Lower on Bleak Earnings Report - May 5, 2014

PFE shares traded lower for the past few days, as Pfizer reported a weaker earnings figure. According to the latest release, profit shrank by 15% in the first three months of this year.

The pharmaceutical company refrained from giving comments on the pursuit of AstraZeneca PLC nor on the per share earnings of the company, noting that this is part of the UK Takeover Code rules. It did confirm its adjusted revenue and adjusted earnings guidance, which was already announced in an earlier news release.

Recall that PFE shares started dropping soon after the drug-making company announced a $106 billion bid for AstraZeneca PLC and was rejected for being too low. Since then, PFE shares found resistance at the $32.25 levels and traded down to $30.75 today.

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PFE Shares Forecast

The daily stock chart shows that PFE shares have a long way to go before reaching the bottom of the range and oscillators confirm that there’s enough selling pressure left. Downbeat reports from the company could even trigger a sharp break of the near-term support at $29.75.

For now though, the 50 SMA (simple moving average) hasn’t crossed below the 200 SMA just yet, indicating that the much longer-term uptrend is still intact. However, MACD is still moving lower, which means that sellers are in control.

In its latest earnings report, Pfizer reported $2.33 billion in profits, down from the previous $2.75 billion. This brings the earnings per share from 38 cents down to 36 cents for the first quarter of 2014. Revenue is down 8.5% to $11.35 billion.

This decline in earnings and consecutively in PFE shares performance was widely anticipated by stock analysts, as the company has hinted at further losses because of expiring patents this year. The company is also losing revenue as it faces stiff competition from cheaper generic drugs, which have grown in popularity.

To contact the reporter of the story: Jonathan Millet at john@forexminute.com