S&P 500 Pre-Market: Pfizer Jumps on Profit Hike While Yum Brands Struggles With US Sales

Pfizer Boosts 2025 Profit Outlook After Strong Q2; Yum Brands Disappoints on U.S. Weakness

Pfizer raised its full-year adjusted profit guidance following better-than-expected second-quarter earnings and revenue. Cost-saving measures and improved operational performance drove the gains, even as the company absorbed a one-time charge tied to a licensing deal. Meanwhile, Yum Brands missed estimates as U.S. softness at Pizza Hut and KFC weighed on results.

How Did Pfizer Outperform in Q2 Earnings?

Pfizer reported adjusted earnings of 78 cents per share on revenue of $14.65 billion, surpassing analyst expectations of 58 cents per share on $13.56 billion in revenue. Net income soared to $2.91 billion, or 51 cents per share, from just $41 million a year ago. Excluding charges tied to restructuring and intangible asset costs, the drugmaker benefited from broad-based growth outside its shrinking Covid franchise.

What’s Driving Pfizer’s Raised Forecast for 2025?

The company now sees full-year adjusted profit between $2.90 and $3.10 per share, up from its prior range of $2.80 to $3.00. It held its revenue outlook steady at $61 billion to $64 billion. Notably, Pfizer is absorbing a $1.35 billion charge in Q3 from a licensing deal with China’s 3SBio, equal to 20 cents per share, while still raising earnings expectations—a reflection of confidence in underlying growth and cost controls.

How Are Tariffs and Drug Pricing Pressures Factored In?

Pfizer’s outlook accounts for tariffs imposed by the Trump administration on China, Canada, and Mexico, along with potential regulatory pressure to lower drug prices in the U.S. While the company didn’t break out exact cost impacts, it previously estimated $150 million in tariff-related expenses this year. The updated guidance suggests those costs are being managed effectively through its expanded cost-cutting initiatives, which aim for $7.7 billion in savings by 2027.

Why Did Yum Brands Miss Expectations Despite Higher Sales?

Yum Brands posted adjusted earnings of $1.44 per share on $1.93 billion in revenue, missing estimates of $1.46 and $1.94 billion respectively. While net income edged higher to $374 million from $367 million, U.S. same-store sales declined at Pizza Hut and KFC. Global net sales rose 10%, but domestic weakness overshadowed international gains, raising concerns about U.S. consumer demand trends.

Market Outlook: Can Cost Cuts and Consumer Trends Steer Performance?

Pfizer’s improved profit guidance signals confidence despite regulatory headwinds, making its cost-cutting strategy a key driver to watch. Traders should monitor Q3 earnings for margin resilience post-licensing charge and any updates on regulatory risk. For Yum, focus will shift to whether U.S. demand stabilizes or deteriorates further in H2, especially as discretionary spending remains pressured.

More Information in our Economic Calendar.