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What Awaits MNK & Other Drug Stocks this Earnings Season?
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The Q2 earnings season is picking up pace and so far, we have seen better-than-expected results from the majority of the companies. Going into specifics, approximately 317 companies (accounting for 73.5% of the S&P 500 index’s total market capitalization) have come up with earnings results, with a whopping 72.9% beating bottom-line expectations and 53.6% topping revenues. However, earnings recorded a 3.3% year-over-year decline due to 0.9% lower revenues.
Although Q2 is still on track to be the fifth quarter in a row to record negative earnings growth, the rate of growth has improved modestly last quarter’s levels. Similarly, even though estimates for the third quarter are still moving south, the magnitude of the fall has declined considerably. By the end of this week, nearly 87% members of the benchmark index will have reported quarterly numbers, making the earnings picture even clearer.
How did the Medical Sector Perform?
Medical is one of the few sectors that are poised to record positive earnings growth this quarter. Encouragingly, the sector has exceeded expectations based on the quarterly results of 63.5% member companies. Average earnings in the sector recorded 5.4% growth on 10.5% higher revenues, resulting in a blended beat of 75.8%. Bigwigs like Johnson & Johnson (JNJ - Free Report) , Novartis AG (NVS - Free Report) and Abbott Laboratories (ABT - Free Report) were able to beat expectations comfortably. In the biotech space, Gilead Sciences (GILD - Free Report) missed on revenues in spite of an earnings beat, while Biogen (BIIB - Free Report) topped bottom-line estimates. AbbVie (ABBV - Free Report) and Merck & Co. Inc. (MRK - Free Report) were also able to top earnings expectations.
Let’s see what’s in store for a few medical companies that are expected to declare quarterly numbers on Aug 2.
Dublin, Ireland-based Mallinckrodt plc is expected to report third-quarter fiscal 2016 results. Mallinckrodt's strategic acquisitions over the last few years have broadened its portfolio significantly and boosted growth prospects. The company’s Specialty Brands segment is performing well and should help the company meet the raised outlook for fiscal 2016. The company has an impressive track record having beaten estimates in all of the last four quarters, bringing the positive average earnings surprise to 12.4%. However, the combination of Mallinckrodt’s Zacks Rank #2 (Buy) and 0.00% Earnings ESP makes surprise prediction difficult for this quarter. (Read more: Mallinckrodt Q3 Earnings: Will the Stock Surprise?)
Prothena Corporation plc (PRTA - Free Report) is expected to report second-quarter 2016 results. It is a development-stage biotechnology company focused on the development of novel protein immunotherapies that can be used for the treatment of diseases involving amyloid or cell adhesion. Prothena’s track record has been has dismal so far. Over the four trailing quarters, the company’s earnings have missed estimates thrice, managing to beat only once, bringing the average negative earnings surprise to 6.51%. Although Prothena’s Zacks Rank #3 (Hold) increases the predictive power of ESP, its 0.00% ESP makes surprise prediction difficult. (Read more: What's in Store for Prothena This Earnings Season?)
Pfizer Inc. (PFE - Free Report) is scheduled to report second-quarter 2016 results. Pfizer has been strengthening its product portfolio and its pipeline through strategic acquisitions and licensing deals. The company has an impressive track record. Its earnings have surpassed expectations in each of the last four quarters, with an average positive surprise of 12.80%. In the last reported quarter, Pfizer posted a positive earnings surprise of 21.82%. The company currently carries a Zacks Rank #3. However, its Earnings ESP of 0.00% has come down from +1.61%. The present combination of Pfizer’s Zacks Rank #3 and 0.00% ESP makes surprise prediction difficult. (Read more: Pfizer Likely to Beat Earnings in Q2 Again?)
Sagent Pharmaceuticals, Inc. is expected to report second-quarter results. The company recently entered into a definitive merger agreement with Nichi-Iko Pharmaceutical Co., under which the latter will acquire Sagent for a total consideration of approximately $736 million. The company has a mixed track record, having beaten expectations twice, missed them once and met them once in the last four trailing quarter. Although the company’s Zacks Rank #2 increases the predictive power of ESP, its 0.00% ESP makes surprise prediction difficult this quarter.
Stay tuned! Check later for our full write-up on earnings releases of these stocks.
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What Awaits MNK & Other Drug Stocks this Earnings Season?
The Q2 earnings season is picking up pace and so far, we have seen better-than-expected results from the majority of the companies. Going into specifics, approximately 317 companies (accounting for 73.5% of the S&P 500 index’s total market capitalization) have come up with earnings results, with a whopping 72.9% beating bottom-line expectations and 53.6% topping revenues. However, earnings recorded a 3.3% year-over-year decline due to 0.9% lower revenues.
Although Q2 is still on track to be the fifth quarter in a row to record negative earnings growth, the rate of growth has improved modestly last quarter’s levels. Similarly, even though estimates for the third quarter are still moving south, the magnitude of the fall has declined considerably. By the end of this week, nearly 87% members of the benchmark index will have reported quarterly numbers, making the earnings picture even clearer.
How did the Medical Sector Perform?
Medical is one of the few sectors that are poised to record positive earnings growth this quarter. Encouragingly, the sector has exceeded expectations based on the quarterly results of 63.5% member companies. Average earnings in the sector recorded 5.4% growth on 10.5% higher revenues, resulting in a blended beat of 75.8%. Bigwigs like Johnson & Johnson (JNJ - Free Report) , Novartis AG (NVS - Free Report) and Abbott Laboratories (ABT - Free Report) were able to beat expectations comfortably. In the biotech space, Gilead Sciences (GILD - Free Report) missed on revenues in spite of an earnings beat, while Biogen (BIIB - Free Report) topped bottom-line estimates. AbbVie (ABBV - Free Report) and Merck & Co. Inc. (MRK - Free Report) were also able to top earnings expectations.
Let’s see what’s in store for a few medical companies that are expected to declare quarterly numbers on Aug 2.
Dublin, Ireland-based Mallinckrodt plc is expected to report third-quarter fiscal 2016 results. Mallinckrodt's strategic acquisitions over the last few years have broadened its portfolio significantly and boosted growth prospects. The company’s Specialty Brands segment is performing well and should help the company meet the raised outlook for fiscal 2016. The company has an impressive track record having beaten estimates in all of the last four quarters, bringing the positive average earnings surprise to 12.4%. However, the combination of Mallinckrodt’s Zacks Rank #2 (Buy) and 0.00% Earnings ESP makes surprise prediction difficult for this quarter. (Read more: Mallinckrodt Q3 Earnings: Will the Stock Surprise?)
MALLINCKRODT PL Price and EPS Surprise
MALLINCKRODT PL Price and EPS Surprise | MALLINCKRODT PL Quote
Prothena Corporation plc (PRTA - Free Report) is expected to report second-quarter 2016 results. It is a development-stage biotechnology company focused on the development of novel protein immunotherapies that can be used for the treatment of diseases involving amyloid or cell adhesion. Prothena’s track record has been has dismal so far. Over the four trailing quarters, the company’s earnings have missed estimates thrice, managing to beat only once, bringing the average negative earnings surprise to 6.51%. Although Prothena’s Zacks Rank #3 (Hold) increases the predictive power of ESP, its 0.00% ESP makes surprise prediction difficult. (Read more: What's in Store for Prothena This Earnings Season?)
PROTHENA CP PLC Price and EPS Surprise
PROTHENA CP PLC Price and EPS Surprise | PROTHENA CP PLC Quote
Pfizer Inc. (PFE - Free Report) is scheduled to report second-quarter 2016 results. Pfizer has been strengthening its product portfolio and its pipeline through strategic acquisitions and licensing deals. The company has an impressive track record. Its earnings have surpassed expectations in each of the last four quarters, with an average positive surprise of 12.80%. In the last reported quarter, Pfizer posted a positive earnings surprise of 21.82%. The company currently carries a Zacks Rank #3. However, its Earnings ESP of 0.00% has come down from +1.61%. The present combination of Pfizer’s Zacks Rank #3 and 0.00% ESP makes surprise prediction difficult. (Read more: Pfizer Likely to Beat Earnings in Q2 Again?)
PFIZER INC Price and EPS Surprise
PFIZER INC Price and EPS Surprise | PFIZER INC Quote
Sagent Pharmaceuticals, Inc. is expected to report second-quarter results. The company recently entered into a definitive merger agreement with Nichi-Iko Pharmaceutical Co., under which the latter will acquire Sagent for a total consideration of approximately $736 million. The company has a mixed track record, having beaten expectations twice, missed them once and met them once in the last four trailing quarter. Although the company’s Zacks Rank #2 increases the predictive power of ESP, its 0.00% ESP makes surprise prediction difficult this quarter.
SAGENT PHARMA Price and EPS Surprise
SAGENT PHARMA Price and EPS Surprise | SAGENT PHARMA Quote
Stay tuned! Check later for our full write-up on earnings releases of these stocks.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>