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Peek Into Drug Stocks' Earnings on Oct 28: ABBV & IMGN

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The third-quarter earnings season is seeing possibly the best growth pace since the first quarter of 2015. As of Oct 26, 198 S&P 500 members (as of Oct 26), accounting for 48.9% of the index’s total market capitalization, have reported results, according to the Earnings Trends report.

While total earnings for these 198 index members were up 3.2% from the year-ago quarter, revenues were up 1.9% year over year. The beat ratio was 73.7% for earnings and 61.1% for revenues. The Q3 earnings season has seen more positive surprises and fewer negative revisions to the current-period (2016 Q4) estimates.

Notably, the third quarter is on track to be the first quarter for positive earnings growth after five consecutive quarters of earnings decline for the S&P 500 index. The picture is expected to steadily improve hereafter.

Among other pharma companies that reported this week, Biogen Inc (BIIB - Free Report) and Merck & Co., Inc (MRK - Free Report) beat the estimates for both earnings and sales. Eli Lilly and Company’s (LLY - Free Report) third-quarter results were, however, below expectations with both earnings and sales missing the Zacks Consensus Estimate. Vertex Pharmaceuticals Incorporated (VRTX - Free Report) also reported results earlier this week – though the company missed estimates, its pipeline update on its next generation correctors brought some relief.

Two more companies from the healthcare sector are set to report their next quarterly results on Oct 28. Let's see how things are shaping up for their respective announcements.

AbbVie Inc. (ABBV - Free Report)

AbbVie, which is scheduled to report its third-quarter results, had delivered a positive earnings surprise of 5.00% in the second quarter. AbbVie’s performance has been pretty impressive, with consistent positive surprises. The average earnings beat over the last four quarters is 3.32%.

The company has an Earnings ESP of 0.00% and a Zacks Rank #3 (Hold). The Zacks Consensus Estimate for the quarter is pegged at $1.21 per share.

ABBVIE INC Price and EPS Surprise

 

ABBVIE INC Price and EPS Surprise | ABBVIE INC Quote

Key drug, Humira, should remain the main growth driver in the third quarter. However, a factor to be considered for international Humira sales is the impact of Remicade and Enbrel biosimilars (Read More: Can AbbVie Sustain Earnings Beat Trend in Q3?).

Our previous article shows that AbbVie is likely to beat on earnings this quarter. However, estimates changed thereafter and we are no longer confident about an earnings beat.

Please check our Earnings ESP Filter that enables you find stocks that are expected to come out with earnings surprises.

ImmunoGen, Inc.

ImmunoGen is scheduled to report its results for the three months ended Sep 30before the opening bell. ImmunoGen’s track record has been disappointing so far as it has been continuously missing expectations in each of the past four quarters. Overall, it posted an average negative earnings surprise of 19.54%.

Last quarter, ImmunoGen recorded a negative surprise of 24.39%.The Zacks Consensus Estimate for the quarter is pegged at 38 cents per share.

IMMUNOGEN INC Price and EPS Surprise

 

IMMUNOGEN INC Price and EPS Surprise | IMMUNOGEN INC Quote

The company has an Earnings ESP of -5.26% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The company provided its guidance for the six-month period (Jul 1 to Dec 31) at the fourth quarter conference call held in August. For this period, ImmunoGen expects revenues of $40 million to $45 million; operating expenses of $95 million to $100 million; and net loss of $55 million to $60 million. (Read More: What's Ahead for ImmunoGen This Earnings Season?).

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