Pfizer beats Wall Street estimates on tax gain

US drugmaker Pfizer beat analysts' estimates for adjusted profits on Tuesday, leading the group to issue a bullish forecast for the current trading year after Donald Trump's tax reforms reduced its tax rate from 23% to 17%.

Pfizer said it was expecting to make adjusted earnings of around $2.90 to $3.00 per share in 2018, topping the consensus forecast of $2.78, and was anticipating revenues between $53.5bn and $55.5bn, again ahead of expectations of $53.9bn.

"Our effective tax rate on adjusted income is expected to be approximately 17% in 2018, significantly lower than the approximately 23% that we previously anticipated for full-year 2017, prior to the enactment of tax reform," said chief financial officer Frank D'Amelio.

The company recorded an $11.34bn gain from the new tax law, pushing fourth-quarter profit to $12.27bn, or $2.02 per share.

Excluding the tax gain and other items, Pfizer pulled in $0.62 per share as revenue rose marginally to $13.7bn over the three months leading to 31 December.

Pfizer was also gearing up for a tax bill of approximately $15bn in order to repatriate cash it held overseas, payment of which it planned to spread out over the next eight years, but said it would use savings made as a result of the reforms to boost investment in the US. It also vowed to put around $5bn in capital projects in the US, make a $500m contribution to its US pension plan in 2018, and allocate approximately $100m for a special, one-time bonus to be paid to all non-executive Pfizer staff in the first quarter.

At 1545 GMT, the shares were down 2.4% to $38.10.