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Drug Stocks Reporting Q4 Earnings on Jan 31: LLY and PFE
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As the Q4 earnings season picks up pace, we believe this quarter is witnessing the highest growth momentum in the last eight quarters. As of Jan 27, 2017, 170 S&P 500 members, accounting for 33.9% of the index’s total market capitalization, have reported results, according to the Earnings Preview report.
Total earnings for these 170 index members were up 6.0% from the year-ago quarter on a 3.1% improvement in revenues. The beat ratio was 64.1% for earnings and 54.7% for revenues. We remind investors that Q3 was the first quarter to see positive earnings growth (+3.8%) after five consecutive quarters of an earnings decline for the S&P 500 index.
However, for these 170 index members, Q4 has seen fewer positive earnings surprises than the previous quarter.
Nonetheless, the positive earnings growth momentum is expected to continue through the season. As per our Earnings Preview report, total earnings for the S&P 500 companies will grow 5.2% year over year on 4.0% higher revenues. Please note that estimates for the current period (1Q17) are also looking up.
However, the picture hasn’t been as bright for the pharmaceutical companies so far this season. Among the handful pharma companies that reported results last week, Biogen Inc (BIIB - Free Report) and Johnson & Johnson (JNJ - Free Report) reported mixed results, wherein their earnings beat estimates but revenues missed the same. Both the companies saw a slowdown in some of their key drugs’ sales.
Bristol-Myers’ (BMY - Free Report) fourth-quarter results were disappointing as well, with earnings lagging expectations and the company lowering its adjusted earnings outlook. Meanwhile, Celgene Corporation missed expectations for both earnings and sales.
Here we have two pharma giants that are set to report fourth-quarter results on Jan 31. Let's see how things are shaping up for this quarter.
Pfizer, which is scheduled to release earnings before the market opens, had delivered a negative surprise of 1.61% last quarter. However, the pharma giant has a decent track record. The company’s earnings surpassed expectations in three of the last four quarters, with an average positive surprise of 6.34%.
For this quarter, Pfizer has an Earnings ESP of 0.00% and a Zacks Rank #3 (Hold). The Zacks Consensus Estimate is pegged at 50 cents.
While both new products like Xalkori, Xeljanz and Ibrance and old products like Lyrica will likely contribute meaningfully to the top line, earnings are anticipated to be driven by cost savings and share buybacks. (Read More: What Lies in Store for Pfizer this Earnings Season?).
You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Lilly is scheduled to announce results before the opening bell. Lilly’s bottom-line performance has been mixed so far, with its earnings surpassing expectations in two of the last four quarters, and missing the same in the other two, bringing the average negative surprise to 2.05%.
Last quarter, Lilly recorded a negative surprise of 8.33%.The Zacks Consensus Estimate for the quarter is pegged at 99 cents.
New products likeTrulicity, Cyramza, Taltz and Jardiance supported the top line in the third quarter. We expect the trend to continue in the fourth quarter as well. However, sales of Alimta, Cymbalta and Zyprexa are likely to decline. (Read More: Will Eli Lilly’s Earnings Surpass Estimates in Q4?)
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Drug Stocks Reporting Q4 Earnings on Jan 31: LLY and PFE
As the Q4 earnings season picks up pace, we believe this quarter is witnessing the highest growth momentum in the last eight quarters. As of Jan 27, 2017, 170 S&P 500 members, accounting for 33.9% of the index’s total market capitalization, have reported results, according to the Earnings Preview report.
Total earnings for these 170 index members were up 6.0% from the year-ago quarter on a 3.1% improvement in revenues. The beat ratio was 64.1% for earnings and 54.7% for revenues. We remind investors that Q3 was the first quarter to see positive earnings growth (+3.8%) after five consecutive quarters of an earnings decline for the S&P 500 index.
However, for these 170 index members, Q4 has seen fewer positive earnings surprises than the previous quarter.
Nonetheless, the positive earnings growth momentum is expected to continue through the season. As per our Earnings Preview report, total earnings for the S&P 500 companies will grow 5.2% year over year on 4.0% higher revenues. Please note that estimates for the current period (1Q17) are also looking up.
However, the picture hasn’t been as bright for the pharmaceutical companies so far this season. Among the handful pharma companies that reported results last week, Biogen Inc (BIIB - Free Report) and Johnson & Johnson (JNJ - Free Report) reported mixed results, wherein their earnings beat estimates but revenues missed the same. Both the companies saw a slowdown in some of their key drugs’ sales.
Bristol-Myers’ (BMY - Free Report) fourth-quarter results were disappointing as well, with earnings lagging expectations and the company lowering its adjusted earnings outlook. Meanwhile, Celgene Corporation missed expectations for both earnings and sales.
Here we have two pharma giants that are set to report fourth-quarter results on Jan 31. Let's see how things are shaping up for this quarter.
Pfizer Inc. (PFE - Free Report)
Pfizer, which is scheduled to release earnings before the market opens, had delivered a negative surprise of 1.61% last quarter. However, the pharma giant has a decent track record. The company’s earnings surpassed expectations in three of the last four quarters, with an average positive surprise of 6.34%.
Pfizer, Inc. Price and EPS Surprise
Pfizer, Inc. Price and EPS Surprise | Pfizer, Inc. Quote
For this quarter, Pfizer has an Earnings ESP of 0.00% and a Zacks Rank #3 (Hold). The Zacks Consensus Estimate is pegged at 50 cents.
While both new products like Xalkori, Xeljanz and Ibrance and old products like Lyrica will likely contribute meaningfully to the top line, earnings are anticipated to be driven by cost savings and share buybacks. (Read More: What Lies in Store for Pfizer this Earnings Season?).
You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Eli Lilly and Company (LLY - Free Report)
Lilly is scheduled to announce results before the opening bell. Lilly’s bottom-line performance has been mixed so far, with its earnings surpassing expectations in two of the last four quarters, and missing the same in the other two, bringing the average negative surprise to 2.05%.
Last quarter, Lilly recorded a negative surprise of 8.33%.The Zacks Consensus Estimate for the quarter is pegged at 99 cents.
Eli Lilly and Company Price and Consensus
Eli Lilly and Company Price and Consensus | Eli Lilly and Company Quote
The company has an Earnings ESP of 1.01% and a Zacks Rank #2 (Buy), indicating a likely positive surprise. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
New products likeTrulicity, Cyramza, Taltz and Jardiance supported the top line in the third quarter. We expect the trend to continue in the fourth quarter as well. However, sales of Alimta, Cymbalta and Zyprexa are likely to decline. (Read More: Will Eli Lilly’s Earnings Surpass Estimates in Q4?)
Looking for Ideas with Even Greater Upside?
Today's investment ideas are short-term, directly based on our proven 1 to 3 month indicator. In addition, I invite you to consider our long-term opportunities. These rare trades look to start fast with strong Zacks Ranks, but carry through with double and triple-digit profit potential. Starting now, you can look inside our home run, value, and stocks under $10 portfolios, plus more. Click here for a peek at this private information >>