Pfizer shares have lost more than half their value from their pandemic-era highs

International News via Reuters:

Pfizer raised its full-year profit forecast on Tuesday while reporting second-quarter results that topped Wall Street estimates, and said it expects to benefit from further cost-cutting across its research and manufacturing operations.

The New York-based drugmaker’s shares jumped 4% to $24.49 in early trading.

Pfizer shares have lost more than half their value from their pandemic-era highs as it deals with waning revenue from COVID products and looming patent expirations for key drugs. In response, the company launched a major cost-cutting program.

Pfizer said it was on track to deliver $7.2 billion in net savings by the end of 2027, about $4.5 billion coming by the end of 2025.

J.P. Morgan analyst Chris Schott said the quarterly beat and forecast raise did not come as a surprise given the company’s better-than-expected cost management, and that Pfizer could further raise its profit target as the year progresses.

The company now expects adjusted earnings of $2.90 to $3.10 per share, up from its prior view of $2.80 to $3.00. The forecast includes a one-time charge of 20 cents per share related to its licensing deal with China’s 3SBio for an experimental cancer treatment.

“Pfizer continues to lean on cost management as the main lever to drive performance going forward,” said Daniel Barasa, portfolio manager at Gabelli Funds, which owns Pfizer’s shares.

The pharmaceutical industry is facing intense pressure from U.S. President Donald Trump to lower prices Americans pay for prescription medicines, while preparing for 15% tariffs on imports from the European Union.

Pfizer shares had fallen over 11% this year, compared to a 1.7% decline for the broader NYSE Arca Pharmaceutical Index.

The company said its forecast also absorbs the impact of currently imposed tariffs on goods imported from China, Canada and Mexico, as well as potential price changes this year based on the letter it received from Trump on July 31.

“We continue to be actively engaged with policymakers as we navigate a complicated and rapidly evolving geopolitical environment,” said CEO Albert Bourla in prepared remarks.

Pfizer has said it has enough manufacturing capacity across its 10 U.S. sites to mitigate any tariff impact and is open to shifting some production to those facilities.

Total quarterly sales of $14.65 billion topped analysts’ estimates by over $1 billion, according to LSEG data, and included a $22 million favorable impact from foreign exchange.

‘NOT A GOOD SIGN’

Despite the beat, Pfizer maintained its full-year sales forecast of $61 billion to $64 billion. Two investors said the company was being conservative.

“I think that they’re just trying to balance the outlook over the next 12 to 18 months from where they grow revenue as it starts to fall off as some of those more popular drugs turn generic,” said Brian Mulberry, portfolio manager at Zacks Investment Management.

The blood thinner Eliquis, which Pfizer shares with Bristol Myers Squibb, could start facing U.S. generic competition in 2028. It had sales of $2 billion for the quarter, while analysts were expecting $1.94 billion.

Sales of antiviral COVID-19 treatment Paxlovid of $427 million for the quarter far exceeded analysts’ expectations of $244.4 million.

COVID vaccine Comirnaty, which Pfizer makes with German partner BioNTech, brought in sales of $381 million. Analysts were expecting $188 million.

Quarterly sales of the heart disease treatment sold under brand names Vyndaqel and Vyndamax were $1.62 billion, slightly above estimates of $1.59 billion.

On an adjusted basis, Pfizer earned 78 cents per share for the second quarter, topping analysts’ expectations by 20 cents.

David Wagner, portfolio manager at Aptus Capital Management, said that while the company should be credited for its near-term execution, concerns about long-term growth remained.

“It’s just not a good sign where you’re cutting costs because there’s a lack of growth in the future for your company,” he said.

Reporting by Bhanvi Satija and Mrinalika Roy in Bengaluru and Michael Erman in New York; Editing by Anil D’Silva and Bill Berkrot

The EU-U.S. agreement leaves many questions open, including tariff rates on wine and spirits

International News via Reuters:

The European Union still expects turbulence in trade relations with Washington, but it believes it has a good insurance policy thanks to a framework deal that covers most goods it exports to the U.S. by a maximum 15% tariff, an EU official said.

With the new rates set to enter into force in a couple of days, the 27-nation bloc, which is the U.S.’s biggest trading partner, is still waiting for executive orders that would bring down the tariff on some products, including cars and car parts, down to the agreed 15% rate.

A senior EU official said he expected that to happen “very soon”.

“We do expect further turbulence, but we have a clear insurance policy – the 15% tariff across the board. If the U.S. administration does not stick to that, we have the means to react to that,” the official told reporters.

“The situation requires management, we have not solved everything in one go, but we have a solid foundation, we have changed fundamentally the approach with the U.S. Others are in a far worse position,” the official said.

The EU-U.S. agreement leaves many questions open, including tariff rates on wine and spirits.

Talks on a joint statement with the U.S. that will spell out more details are very advanced, with the text broadly ready and the EU waiting for a response from Washington to finalise things, the official said. He declined to give a timeline for its release.

The 15% tariff that European Union goods face when entering the United States is all-inclusive, unlike the deals some other countries have struck with Washington, the EU official said.

For instance, while cheese exported to the U.S. from the EU will face a 15% tariff, UK cheese, once all tariffs are included, will face a tariff of more than 24%, he said.

‘BEST AVAILABLE’

“What we have obtained in our deal is the best available treatment,” the EU official told reporters, while adding that the 27-nation bloc was not celebrating the 15% rate, but that it considered it was a very good deal compared to others.

Tariffs on pharmaceuticals and semiconductors are currently zero, but if they rise as a result of a U.S. probe into imports of those products, they will not exceed the 15% ceiling.

Discussions on steel are taking longer due to the need to address volume-related issues, he said.

The EU is also working to finalise a list of essential products that will be exempt from U.S. tariffs, a process the official said will take some time. The EU is trying to get as many products as possible into the list of tariffs exemption, at a zero-for-zero rate.

The head of France’s wine and spirits exporters federation said he was still hoping for a U.S. tariffs exemption on those products.

“We are 48 hours away from a decision, and we have not lost hope that wines and spirits can be exempted,” Gabriel Picard, head of the FEVS wines and spirits exporters federation, told France Inter radio on Tuesday.

Investor sentiment in the euro zone unexpectedly tumbled in August in one of the first indications that the business community is unimpressed with the EU’s trade deal, a survey showed on Monday.

Meanwhile, German engineering orders fell 5% in June compared with a year earlier, with dips in both domestic and foreign demand reflecting uncertainty caused by the trade tensions, engineering association VDMA said.

France and Germany are among EU countries that have said the bloc had been too weak during trade negotiations with the United States and it should become stronger.

Reporting by Jan Strupczewski, Julia Payne, Sudip Kar-Gupta; Writing by Ingrid Melander; Editing by Alison Williams

Corporate treasuries held at least 966,304 ether tokens on their balance sheets at the end of July

International News via Reuters:

Some companies are favoring ether over bitcoin as an inflation hedge as the cryptocurrency hits a sweet spot between affordability and credibility, while being underpinned by a strong blockchain backbone.

Corporate treasuries held at least 966,304 ether tokens on their balance sheets at the end of July, worth nearly $3.5 billion, according to a Reuters analysis of regulatory filings and disclosures. That compares with just under 116,000 at the end of 2024.

The second-largest cryptocurrency has become the token of choice for those looking for more active returns. Unlike bitcoin, which solely relies on price appreciation, ether can be used in staking, a practice where holders lock up their tokens to support the ethereum network in exchange for rewards.

Staking can offer yields of about 3% to 4%.

“Ether balances growth potential with the legitimacy of a blue-chip asset. It is large enough to be institutional-grade, yet early enough in adoption to benefit from future upside,” said Sam Tabar, CEO of Bit Digital, which has ether on its balance sheet.

The cryptocurrency also powers the ethereum blockchain, which supports a wide range of applications including lending platforms, trading protocols and stablecoins, making it a core component of the crypto financial system.

“Holding ether is more like owning oil, whereas bitcoin is more one-dimensional, like gold. Ether is the foundation of decentralized finance, not just a pure store of value,” said Anthony Georgiades, general partner at VC firm Innovating Capital.

Still, challenges such as regulatory uncertainty and price volatility, which affect the assets’ fair value, continue to hinder adoption.

CAUTION AMID HYPE

After disclosing plans to accumulate ether earlier this year, shares of Peter Thiel-backed BitMine and gaming media network GameSquare jumped as much as 3,679% and 123%, respectively, underscoring how eager investors are to chase crypto-linked momentum.

But analysts have cautioned against unfettered optimism.

“The share price response has the hallmarks of the meme craze,” said Dan Coatsworth, investment analyst at AJ Bell.

The inherent volatility of crypto tokens also makes it a poor fit for boards with a low risk appetite, which could curb ether’s appeal beyond core industry players.

“Most CFOs would not swap liquid cash for ether. It remains a niche tool best left to ‘tech-forward’ treasuries that can tolerate swings and complexity,” said Anuj Karnik, founder and managing director at Straitsberg, a Singapore-based treasury advisory firm.

“Treasury best-practice values liquidity, predictability and regulatory certainty above all. Most corporate leaders view crypto holdings today as experimental ‘alternative’ allocations, not mainstream policy.”

Also, while the Securities and Exchange Commission has softened its stance on staking activities, the regulatory framework around the practice is still evolving.

Key questions include whether rewards should be taxed as income, how to treat locked tokens on balance sheets and whether offering staking services could trigger custodial obligations.

“Every staking reward could be landing in a compliance gray zone,” said Michael Ashley Schulman, partner and chief investment officer at Running Point Capital Advisors.

Still, despite the risks, some companies continue to double down, raising capital through share sales or debt offerings to fund their ether purchases.

BitMine sold a $182 million stake to Cathie Wood’s ARK Invest in July. GameSquare CEO Justin Kenna also told Reuters his company might sell stock to invest in ether.

“We’re not in the business of being overly dilutive. But we’ll continue to be opportunistic,” Kenna said.

Reporting by Manya Saini and Niket Nishant in Bengaluru; Editing by Anil D’Silva

The measures came after China unveiled last week a childcare subsidy until the age of three

International News via Reuters:

China will waive tuition fees for children in their final year at public kindergartens, and reduce them for eligible private schools from the next term, the government said on Tuesday, in a phased roll-out of free pre-school education.

The measures came after China unveiled last week a childcare subsidy until the age of three, in an effort to spur a flagging birth rate, as fewer young people choose to have children.

Guidelines from the State Council, or cabinet, said the government would provide subsidies to offset the financial impact of the measures on kindergartens.

It urged local governments to strengthen fund allocation and oversight to ensure kindergartens’ normal operation and prevent wage arrears.

Salaries of public kindergarten teachers should be included in fiscal guarantees to ensure timely and full payment, it added.

High costs of childcare and education, in addition to rising anxieties about jobs, have discouraged many young Chinese from getting married and starting a family.

In 2024, the population fell for a third consecutive year, with experts warning the situation could worsen, after decades of falling birth rates in the wake of a one-child policy enforced from 1980 to 2015, coupled with rapid urbanisation.

Reporting by Ethan Wang and Ryan Woo; Editing by Andrew Heavens and Clarence Fernandez