Pfizer Inc. stock research
FY2023 Q3
Pfizer (PFE) Gross Margin — Quarter Ended Oct 1, 2023
Revenue was slightly higher than the prior quarter, but cost of revenue increased substantially, causing gross profit to decline and gross margin to weaken markedly. Compared to the same quarter last year, both revenue and gross profit were lower, while cost of revenue was higher, resulting in a significantly weakened gross margin.
Gross margin takeaway
Quarter ended Oct 1, 2023 · FY2023 Q3
Revenue was slightly higher than the prior quarter, but cost of revenue increased substantially, causing gross profit to decline and gross margin to weaken markedly. Compared to the same quarter last year, both revenue and gross profit were lower, while cost of revenue was higher, resulting in a significantly weakened gross margin.
- The most observable margin driver is the pronounced increase in cost of revenue relative to revenue, which far exceeded the change in revenue and directly compressed gross profit.
- Gross margin weakened substantially from both the immediately preceding quarter and the same quarter one year earlier, primarily due to a much higher cost of revenue coupled with only a modest revenue increase versus the prior quarter and a revenue decline versus the prior year.
Gross margin snapshot
The selected quarter's reported revenue, gross profit, direct costs, and margin comparisons.
Gross margin
31.3%
Gross profit
$4.2B
Revenue
$13.5B
Cost of revenue
$9.3B
Quarter-over-quarter change
-43.8 pts
Year-over-year change
-41.9 pts
Quarterly gross margin trend
A four-quarter view of the revenue and direct-cost bridge behind gross margin.
| Period | Revenue | Gross profit | Cost of revenue | Gross margin |
|---|---|---|---|---|
| Apr 2, 2023 | $18.5B | $13.6B | $4.9B | 73.6% |
| Jul 2, 2023 | $13.0B | $9.8B | $3.2B | 75.1% |
| Oct 1, 2023 | $13.5B | $4.2B | $9.3B | 31.3% |
Quarterly comparisons
Compare the selected margin with the preceding quarter and the same fiscal quarter one year earlier.
Previous-quarter change
Jul 2, 2023
-43.8 pts
Year-over-year change
Oct 2, 2022
-41.9 pts
What the margin says
Filing-constrained interpretation of margin direction, comparisons, and what to monitor next.
The most observable margin driver is the pronounced increase in cost of revenue relative to revenue, which far exceeded the change in revenue and directly compressed gross profit.
Gross margin weakened substantially from both the immediately preceding quarter and the same quarter one year earlier, primarily due to a much higher cost of revenue coupled with only a modest revenue increase versus the prior quarter and a revenue decline versus the prior year.
Monitor the trajectory of cost of revenue relative to revenue, as it has been the dominant factor in margin compression.