NEW YORK (Reuters) - Pfizer's ( PFE ) quarterly financial report on Tuesday comes at a critical moment for the U.S. drugmaker and its CEO, as activist hedge fund Starboard Value ramps up the pressure to demonstrate concrete results of a promised turnaround.

Investors and analysts said they want to see improved profitability following the company's billions in cost cuts over the past year, as well as revenue growth, particularly from the cancer drugs picked up in the company's 2021 to 2023 acquisition spree.

Pfizer ( PFE ) management also needs to be laying the groundwork for faster growth in 2025, they said.

"You should see a pretty big improvement in earnings next year for a lot of reasons," said Jeff Jonas, portfolio manager at Gabelli Funds, which holds Pfizer ( PFE ) shares.

Jonas said improving sales should lead to a better balance sheet, which will protect the company's dividend. Pfizer's ( PFE ) nearly 6% dividend yield is much higher than most big pharmaceutical companies and has given some investors reason to hold on to the stock as revenue dropped.

Investors have fled Pfizer ( PFE ) as pandemic worries eased and billions of dollars in COVID-19 vaccine and treatment sales disappeared. The roughly $162 billion company's stock is trading at about half its pandemic-era high.

Starboard has argued that Pfizer's ( PFE ) board needs to hold management accountable for the underperformance, particularly questioning its record for producing profitable new drugs from internal research and development or acquisition.

In an interview on CNBC, Starboard CEO Jeff Smith said a change at the top of the company could make sense but stopped short of calling for the resignation of Pfizer ( PFE ) CEO Albert Bourla.

"Something material needs to change. They can't just close their eyes and assume it's going to get better," he said.

'NOT REALLY FOCUSED'

Beyond the loss of COVID-19 revenue, Pfizer ( PFE ) has also had to contend in recent quarters with disappointing data for a closely watched experimental obesity drug, the weak launch of its respiratory syncytial virus (RSV) vaccine, and pulling its sickle cell disease treatment Oxbryta due to deaths in clinical trials.

Pfizer ( PFE ) declined to comment for the story.

Gabelli's Jonas said he would like Pfizer ( PFE ) to tighten its focus on three or four key therapeutic areas, noting that the company has had recent successes in oncology and vaccines.

"They've kind of done a little bit of everything, and not really focused," he said. "So I think there's room for improvement."

Analysts, on average, expect third-quarter revenue of $14.95 billion, a 13% increase from a year ago. Revenue bottomed out in the second quarter of 2023 after the company slashed projections for sales of its COVID vaccine and treatment.

Guggenheim analyst Vamil Divan said COVID could actually be an area of outperformance in the quarter for Pfizer ( PFE ), after a late summer spike in cases around the U.S.

Better-than-expected results for the quarter, however, won't be enough to set investors at ease, he said, adding, Pfizer ( PFE ) executives need to show they are working toward future growth.

"Do they say anything more that can get people comfortable with the longer term, whether it's on the cost side or anything on the pipeline side? I think that buys them some more time," Divan said.

Cancer drugs Padcev and Adcetris, which the company acquired through its $43 billion buyout of Seagen last year, are of particular interest to investors.

William Couchman, an executive at investment firm Birmingham Capital Management, said he expects better results from the Seagen drugs after Pfizer ( PFE ) has more time to integrate the company. Birmingham held around $5 million in Pfizer ( PFE ) shares as of June, according to LSEG data, and Couchman said they've continued buying.

Pfizer ( PFE ) shares closed down less than 1% on Friday at $28.45.

"By the time Pfizer ( PFE ) has proven that there was some wisdom to these acquisitions and that they're getting traction with some other products it won't be a $28 stock anymore," he said.