Moderna on Thursday posted a surprise profit for the third quarter, smashing Wall Street estimates, as its cost-cutting efforts took hold and sales of its Covid vaccine came in higher than expected. 

The biotech company posted a net income of $13 million, or 3 cents per share, for the third quarter. That compares with a net loss of $3.63 billion, or $9.53 cents per share, reported for the year-ago period.

Moderna is slashing expenses, with a recently announced goal of achieving $1.1 billion in savings by 2027, as it tries to recover from the rapid decline of its Covid business. It is the first quarter that includes sales of Moderna’s vaccine against respiratory syncytial virus, or RSV, its second-ever commercially available product. 

Before year end, the company plans to file for approval of its experimental “next-generation” Covid vaccine and combination shot targeting Covid and the flu. Moderna this year also expects to apply for expanded approval of its RSV vaccine, targeting high-risk adults ages 18 to 59. 

Moderna said Thursday its newest Covid vaccine saw benefits after winning approval in the U.S. three weeks earlier than the last iteration of the shot did in 2023, which allowed the biotech company to “meet demand more effectively.” The company was able to ship out doses to pharmacies and healthcare providers and reach the arms of more patients sooner. 

“I think the earlier launch and a steeper ramp drove a much higher sales number” for the Covid vaccine, Moderna CEO Stéphane Bancel said in an interview. During the first week of the vaccine’s launch, the company shipped twice as many products globally than it did in 2023, Bancel noted. 

He added that “this was a big cost reduction quarter, and we’re going to continue to do that.” 

Here’s what Moderna reported for the third quarter compared with what Wall Street was expecting, based on a survey of analysts by LSEG:

• Earnings per share: 3 cents vs. an expected loss of $1.90
• Revenue: $1.86 billion vs. $1.25 billion expected

Moderna booked third-quarter sales of $1.86 billion, only slightly higher than the $1.83 billion in revenue it recorded during the same period a year ago. The vast majority of that total came from its Covid shot, including $1.2 billion in U.S. sales and roughly $600 million from international markets. 

The company’s third-quarter revenue also included $10 million in U.S. sales of its RSV shot, which won approval in May. Moderna said that sales of that shot were lower than expected since it was approved and recommended by regulators later in the contracting season, when many vaccine distributors had already completed their orders. 

Analysts had expected sales of $132 million for the RSV vaccine, according to estimates compiled by StreetAccount. Moderna’s RSV shot is so far approved in the U.S., European Union, Norway, Iceland and Qatar. 

The company reiterated its full-year 2024 product sales guidance of roughly $3 billion to $3.5 billion. Last quarter, Moderna slashed its outlook on lower expected sales in Europe, a “competitive environment” for respiratory vaccines in the U.S. and the potential for deferred international revenue into 2025. 

Shares of Moderna are down almost 50% this year as investors mull over its path forward after Covid. The company is betting on a pipeline built around its messenger RNA platform, which is the technology used in its Covid vaccine and RSV shot. 

The biotech company currently has 45 products in development, and expects to bring 10 of them to the market over the next three years. 

Moderna is developing a standalone flu shot, a personalized cancer vaccine with Merck and shots for latent viruses, among other products.

Cost of sales for the third quarter was $514 million, down 77% from the same period a year ago. That includes $214 million in write-downs of unused doses of the Covid vaccine and $27 million in charges related to the company’s efforts to scale back its manufacturing footprint, among other costs. 

Research and development expenses decreased by 2% to $1.1 billion compared with the same period in 2023. Moderna said that decline was primarily due to lower clinical development and manufacturing expenses, citing decreased spending on clinical trials, among other factors.

Meanwhile, selling, general and administrative expenses for the period fell by 36% to $281 million compared with the third quarter of 2023. SG&A expenses usually include the costs of promoting, selling and delivering a company’s products and services.