Back to top

Analyst Blog

Alexion Pharmaceuticals (ALXN - Analyst Report) is set to report second quarter 2014 results on Jul 24 before market opens. Last quarter, the company had posted an earnings surprise of +29.36%. Let’s see how things are shaping up for this announcement.

Factors at Play

We expect Alexion Pharma to report strong revenues in the second quarter driven by strong Soliris sales in the paroxysmal nocturnal hemoglobinuria and atypical hemolytic uremic syndrome indications. Moreover, a lower tax rate will also benefit results in the second quarter.

However, the bottom line should be hurt by increasing costs. Research & development costs will increase due to the company’s efforts to develop its pipeline. Selling, general and administrative expenses will escalate during the second quarter due to Alexion Pharma’s efforts to expand.

On the first quarter earnings call, Alexion Pharma had announced that it has initiated the rolling submission of a Biologics License Application for asfotase alfa in the hypophosphatasia indication. The rolling submission is expected to be completed in the fall of 2014. We expect an update from Alexion Pharma on the status of the asfotase alfa filing and also on its pipeline.

Earnings Whispers?

Our proven model does not conclusively show that Alexion Pharma is likely to beat earnings this quarter. That is because a stock needs to have both a positive Earnings ESP (Expected Surprise Prediction) and a Zacks Rank of #1, 2 or 3 for this to happen. That is not the case here as you will see below.

Zacks ESP: The Earnings ESP for Alexion Pharma is 0.00% since the Most Accurate Estimate stands at $0.99, in line with the Zacks Consensus Estimate.

Zacks Rank #3 (Hold): Alexion Pharma’s Zacks Rank #3 (Hold) has little effect on the predictive power of ESP because the Zacks Rank #3 when combined with a 0.00% ESP makes surprise prediction difficult.

Other Stocks to Consider

Here are some other companies you may want to consider as our model shows that they have the right combination of elements, i.e., a positive Zacks Earnings ESP and a Zacks Rank #1, #2 or #3.

Endo International (ENDP - Analyst Report) has an earnings ESP of +4.49% and carries a Zacks Rank #2. Endo will report second quarter earnings on Jul 31 before market opens.

Mallinckrodt (MNK - Snapshot Report) has an Earnings ESP of +2.33% and holds a Zacks Rank #1. Mallinckrodt will report third quarter earnings on Aug 7 before market opens.

Impax Laboratories (IPXL - Snapshot Report) has an Earnings ESP of +26.83% and holds a Zacks Rank #3. Impax will report second quarter earnings on Aug 6 before market opens.

Please login to Zacks.com or register to post a comment.