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Drug Stocks Q4 Earnings Lineup for Feb 21: IRWD, MNTA, EXAS

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As the Q4 earnings season enters the last leg, we believe this quarter is on track to witness the highest growth momentum in the last two years. As of Feb 17, 2017, 411 S&P 500 members, accounting for 88.4% of the index’s total market capitalization, have reported results, according to the Earnings Preview report.

Total earnings for these 411 index members are up 8% from the year-ago quarter on a 4.9% improvement in revenues. The beat ratio so far is 68.9% 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.

Meanwhile, the positive earnings growth momentum is expected to ramp up in the future quarters. As per our Earnings Preview report, total earnings for the S&P 500 companies will grow 7.4% year over year on 3.9% higher revenues. Please note that estimates for the current period (first-quarter 2017) are also looking up.

However, the picture hasn’t been as bright for the pharmaceutical companies so far this season. The soft performance of pharma companies seen this earnings season continued last week with Alexion Pharmaceuticals, Inc. delivering in-line earnings while missing revenue estimates. Zoetis Inc. (ZTS - Free Report) surpassed bottom-line estimates while revenues came in line with expectations. However, the company narrowed its outlook for 2017 to account for the currency impact.

Meanwhile, Teva Pharmaceutical Industries Ltd.’s (TEVA - Free Report) fourth-quarter earnings and sales were above expectations. Importantly, the generic drug maker reiterated its 2017 guidance despite the recent Copaxone patent loss.

Here we have three pharma companies that are set to report fourth-quarter results on Feb 21. Let's see how things are shaping up for this quarter.

Ironwood Pharmaceuticals, Inc. (IRWD - Free Report)

Ironwood Pharma, which is scheduled to release earnings after market close, delivered a positive surprise of 21.74% last quarter. The company has a decent track record. The company’s earnings surpassed expectations in three of the last four quarters, with an average positive surprise of 23.86%.

For this quarter, Ironwood Pharma has an Earnings ESP of +30.44% and a Zacks Rank #3 (Hold), indicating a likely positive surprise. The Zacks Consensus Estimate is pegged at a loss of 23 cents.

You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Momenta Pharmaceuticals, Inc.

Momenta is scheduled to announce results before the opening bell. Momenta’s bottom-line performance has been decent so far, with its earnings surpassing expectations in three of the last four quarters. However, over the trailing four quarters, the company has recorded an average negative surprise of 75.74%.

Last quarter, Momenta recorded a positive surprise of 10.34%. The Zacks Consensus Estimate for the quarter is pegged at a loss of 23 cents.

The company has an Earnings ESP of -8.70% and a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Exact Sciences Corporation (EXAS - Free Report)

Exact Sciences is scheduled to release earnings before market opens. Last quarter, the company had delivered a positive surprise of 16.28%. The company has an impressive track record. Its earnings surpassed expectations in each of the last four quarters, with an average positive surprise of 14.12%.

For this quarter, Exact Sciences has an Earnings ESP of +2.56% and a Zacks Rank #2, indicating a likely positive surprise. The Zacks Consensus Estimate is pegged at a loss of 39 cents.

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