Moderna on Thursday posted a surprise quarterly profit, boosted by deferred revenue and cost cuts, even as the company saw slumping sales from its Covid vaccine, its only marketable product.

The results cap a rocky year for the biotech company and other Covid vaccine makers, which all saw revenue plunge as the world continued to emerge from pandemic and relied less on protective shots and treatments.

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

• Earnings per share: 55 cents. That may not be comparable to a loss of 97 cents expected by analysts.  
• Revenue: $2.81 billion vs. $2.50 billion

Moderna posted a net income of $217 million, or 55 cents per share, for the fourth quarter. That compares with a net income of $1.47 billion, or $3.61 per share, reported during the year-ago period.

The biotech company booked fourth-quarter sales of $2.81 billion, with sales of its Covid shot dropping 43% from the same period a year ago. That decline was primarily driven by lower vaccine volumes, but was partially offset by a higher average selling price of the jab, according to Moderna.

Notably, the company said it recorded $600 million in deferred revenue during the quarter related to the company’s work with Gavi, a nongovernmental global vaccine organization that coordinated a global shot distribution program. 

But Moderna CFO Jamey Mock told CNBC in an interview that the deferred revenue is “kind of a nonevent” and isn’t “really the best way to beat earnings.” 

He noted that Moderna is more excited about its lower-than-expected cost of sales, which he called one of the main reasons why the company’s earnings came in above what some analysts were expecting. 

Cost of sales came in at $929 million for the fourth quarter and $4.69 billion for the full year. That includes charges related to the company’s efforts to scale back manufacturing of its Covid shot and write-downs of unused doses of the vaccine. 

In November, Moderna said it had expected costs of sales to come in at $5 billion for the year. 

“We started to see some fruits of productivity in the fourth quarter, and so that’s what we’re happy about,” Mock said, adding that the deferred revenue from Gavi is “just pure accounting.”

Still, the deferred revenue boosted Moderna’s full-year Covid vaccine sales to $6.7 billion, an amount the company first unveiled in January. It booked $18 billion in revenue in 2022 and expects sales from the shot to drop even further in 2024. 

The company noted that the vaccine won 48% of the U.S. Covid vaccine market share last year. That’s up from the 37% it captured in 2022. 

Moderna reiterated its full-year 2024 sales guidance of roughly $4 billion. That forecast includes revenue from its vaccine against respiratory syncytial virus, or RSV, which could win U.S. Food and Drug Administration approval on May 12.

The RSV shot will have a competitive advantage because it’s the only one that comes in a pre-filled syringe, making it easier for pharmacists to administer, CEO Stephane Bancel said on CNBC’s “Squawk Box” on Thursday.

“There is so much more to Moderna than Covid, and that’s what we’re excited about,” Bancel said.

The company will continue to reduce expenses in 2024, Mock noted, including a projected $4.5 billion in full-year research and development expenses, down from $4.8 billion in 2023. 

“We’re going to increase our discipline as well,” Mock said. 

Moderna has said it expects to return to sales growth in 2025 and to break even by 2026, with the launch of new products. The company lost $4.7 billion for the full year 2023, compared with a profit of $8.4
billion the year prior.

Moderna currently has 45 products in development, nine of which are in late-stage trials. They include Moderna’s combination shot targeting Covid and the flu, which could win approval as early as 2025.

The pipeline also includes Moderna’s personalized cancer vaccine, a highly anticipated shot being developed with Merck to target different tumor types in combination with the blockbuster immunotherapy Keytruda. 

Moderna will hold an earnings call with investors at 8 a.m. ET.