Pfizer has expanded its cost-cutting efforts and reported first-quarter profit that exceeded estimates, despite a decline in sales largely due to reduced revenue from its Covid antiviral pill, Paxlovid. The company now anticipates additional savings of approximately $1.2 billion by the end of 2027, primarily in selling, informational, and administrative expenses, driven by enhanced digital enablement, including automation, artificial intelligence, and streamlined business processes. This is in addition to the previously announced $4.5 billion in savings by the end of 2025.

The expanded cost reductions also include expected research and development reorganization cost savings of around $500 million by the end of 2026, which will be reinvested into Pfizer's product pipeline. Pfizer has a separate initiative to cut costs, with the first phase aiming to deliver $1.5 billion in savings by the end of 2027. With the newly announced cuts, Pfizer now expects to achieve approximately $7.7 billion in savings by the end of that year from its two cost-cutting programs.

These measures are designed to help the pharmaceutical giant recover from the decline of its Covid business and stock price. For the first quarter, Pfizer reported adjusted earnings per share of 92 cents, surpassing the expected 66 cents, and revenue of $13.72 billion, slightly below the anticipated $13.91 billion.

The results emerge as drugmakers prepare for potential tariffs on pharmaceuticals imported into the U.S. Pfizer has established a team to analyze potential outcomes and develop strategies to mitigate the impact of tariffs, including managing inventory levels and leveraging domestic manufacturing. The company maintained its full-year 2025 outlook, forecasting sales of $61 billion to $64 billion, with a similar performance from its Covid products as in 2024, while noting that this guidance does not account for potential impacts from future tariffs and trade policy changes.

Pfizer CEO Albert Bourla stated that the company is prepared to navigate an uncertain and volatile external environment. For the first quarter, Pfizer reported net income of $2.97 billion, or 52 cents per share, compared to $3.12 billion, or 55 cents per share, in the same period last year. Revenue for the first quarter was $13.72 billion, down 8% from the previous year.

The decline in sales was primarily due to a decrease in Paxlovid revenue, which was $491 million in the first quarter, a 76% decrease from the prior year, attributed to lower Covid infections and reduced international government purchases. Comirnaty, Pfizer's Covid shot, generated $565 million in revenue, a 60% increase from the same period last year.

Additionally, Pfizer anticipates that changes to the Medicare program resulting from the Inflation Reduction Act will negatively impact sales by $1 billion, reducing growth by approximately 1.6% compared to 2024. Stripping out one-time items, the company expects 2025 earnings to be in the range of $2.80 to $3 a share.

The results also occur amidst uncertainty over immunization policy and regulation, and potential overhauls of federal health agencies.