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Bristol-Myers (BMY) Up 20.5% Since Earnings Report: Can It Continue?
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It has been about a month since the last earnings report for Bristol-Myers Squibb Company (BMY - Free Report) . Shares have added about 20.5% in that time frame, outperforming the market.
Will the recent positive trend continue leading up to the stock’s next earnings release, or is it due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Bristol-Myers Misses on Q4 Earnings, Beats on Sales
The company’s fourth-quarter 2016 earnings came in at $0.63 per share, missing the Zacks Consensus Estimate of $0.66 but increasing 66% from the year-ago period.
Sales Beat
Total revenue of $5.24 billion was above the Zacks Consensus Estimate of $5.15 billion. Moreover, reported revenues jumped 22% from the year-ago quarter. Strong product sales drove the top line in the reported quarter.
Quarterly Details
Global revenues were up 24%, when adjusted for foreign exchange impact.
Sales in the U.S. improved 20% to $2.7 billion, while international revenues improved 25%. Adjusted for foreign exchange impact, international revenues were up 28%.
Leukemia drug Sprycel raked in sales of $494 million, up 15%. Melanoma drug Yervoy contributed $264 million to the top line during the reported quarter, up 23%.
Opdivo, which is approved for multiple cancer indications, generated revenues of $1.3 billion, higher than $920 million in the third quarter of 2016.
However, performance of key drugs in the Virology unit was disappointing. Sales of Baraclude declined 4% to $296 million. Both the Reyataz and Sustiva franchises deteriorated 24% and 21% to $206 million and $246 million, respectively.
Nevertheless, sales of Eliquis were $948 million during the reported quarter, up 57% year over year. Bristol-Myers has a partnership with Pfizer Inc. for Eliquis. Bristol-Myers’ HCV franchise contributed $226 million to its top line, down 51%. Orencia revenues were up 14% to $625 million.
Adjusted research and development (R&D) expenses in the quarter increased 27% to $1.4 billion while marketing, selling and administrative expenses dipped 3% to $1.5 billion.
Gross margin was 73.6% in the quarter, compared with 77.8% in the year-ago quarter, primarily due to product mix.
2016 Results
Full-year 2016 sales rose 17% to $19.43 billion, slightly above the Zacks Consensus Estimate of $19.29 billion.
Adjusted earnings for 2016 were $2.83 per share, up 41% year over year but falling short of the Zacks Consensus Estimate of $2.85. Earnings were in line with the guidance range of $2.80 to $2.90 per share.
2017 Guidance
Bristol-Myers provided its earnings guidance for 2017. The company expects earnings in the range of $2.70 to $2.90 per share. The Zacks Consensus Estimate for earnings is pegged at $2.92.
R&D expenses are expected to increase in the high-single digit range. Marketing, selling and administrative expenses are anticipated to decrease in mid- to high- single-digit range.
Bristol-Myers is transforming its operating model to focus resources on the company’s highest priorities, accelerate its pipeline and streamline the infrastructure. The company expects operating expenses to be roughly flat with 2016 levels through 2020.
How Have Estimates Been Moving Since Then?
Following the release, investors have witnessed a downward trend for fresh estimate. There has been one revision higher for the current quarter compared to three lower.
At this time, Bristol-Myers' stock has an average Growth Score of 'C', though it is lagging a lot on the momentum front with an 'F'. However, the stock was allocated a grade of 'C' on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregte VGM Score of 'C'. If you aren't focused on one strategy, this score is the one you should be interested in.
Zacks' style scores indicate that the company's stock is suitable for value and growth investors.
Outlook
While estimates have been broadly trending downward for the stock, the magnitude of these revisions looks promising. Interestingly, the stock has a Zacks Rank #3 (Hold). We are expecting an inline return from the stock in the next few months.
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Bristol-Myers (BMY) Up 20.5% Since Earnings Report: Can It Continue?
It has been about a month since the last earnings report for Bristol-Myers Squibb Company (BMY - Free Report) . Shares have added about 20.5% in that time frame, outperforming the market.
Will the recent positive trend continue leading up to the stock’s next earnings release, or is it due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Bristol-Myers Misses on Q4 Earnings, Beats on Sales
The company’s fourth-quarter 2016 earnings came in at $0.63 per share, missing the Zacks Consensus Estimate of $0.66 but increasing 66% from the year-ago period.
Sales Beat
Total revenue of $5.24 billion was above the Zacks Consensus Estimate of $5.15 billion. Moreover, reported revenues jumped 22% from the year-ago quarter. Strong product sales drove the top line in the reported quarter.
Quarterly Details
Global revenues were up 24%, when adjusted for foreign exchange impact.
Sales in the U.S. improved 20% to $2.7 billion, while international revenues improved 25%. Adjusted for foreign exchange impact, international revenues were up 28%.
Leukemia drug Sprycel raked in sales of $494 million, up 15%. Melanoma drug Yervoy contributed $264 million to the top line during the reported quarter, up 23%.
Opdivo, which is approved for multiple cancer indications, generated revenues of $1.3 billion, higher than $920 million in the third quarter of 2016.
However, performance of key drugs in the Virology unit was disappointing. Sales of Baraclude declined 4% to $296 million. Both the Reyataz and Sustiva franchises deteriorated 24% and 21% to $206 million and $246 million, respectively.
Nevertheless, sales of Eliquis were $948 million during the reported quarter, up 57% year over year. Bristol-Myers has a partnership with Pfizer Inc. for Eliquis. Bristol-Myers’ HCV franchise contributed $226 million to its top line, down 51%. Orencia revenues were up 14% to $625 million.
Adjusted research and development (R&D) expenses in the quarter increased 27% to $1.4 billion while marketing, selling and administrative expenses dipped 3% to $1.5 billion.
Gross margin was 73.6% in the quarter, compared with 77.8% in the year-ago quarter, primarily due to product mix.
2016 Results
Full-year 2016 sales rose 17% to $19.43 billion, slightly above the Zacks Consensus Estimate of $19.29 billion.
Adjusted earnings for 2016 were $2.83 per share, up 41% year over year but falling short of the Zacks Consensus Estimate of $2.85. Earnings were in line with the guidance range of $2.80 to $2.90 per share.
2017 Guidance
Bristol-Myers provided its earnings guidance for 2017. The company expects earnings in the range of $2.70 to $2.90 per share. The Zacks Consensus Estimate for earnings is pegged at $2.92.
R&D expenses are expected to increase in the high-single digit range. Marketing, selling and administrative expenses are anticipated to decrease in mid- to high- single-digit range.
Bristol-Myers is transforming its operating model to focus resources on the company’s highest priorities, accelerate its pipeline and streamline the infrastructure. The company expects operating expenses to be roughly flat with 2016 levels through 2020.
How Have Estimates Been Moving Since Then?
Following the release, investors have witnessed a downward trend for fresh estimate. There has been one revision higher for the current quarter compared to three lower.
Bristol-Myers Squibb Company Price and Consensus
Bristol-Myers Squibb Company Price and Consensus | Bristol-Myers Squibb Company Quote
VGM Scores
At this time, Bristol-Myers' stock has an average Growth Score of 'C', though it is lagging a lot on the momentum front with an 'F'. However, the stock was allocated a grade of 'C' on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregte VGM Score of 'C'. If you aren't focused on one strategy, this score is the one you should be interested in.
Zacks' style scores indicate that the company's stock is suitable for value and growth investors.
Outlook
While estimates have been broadly trending downward for the stock, the magnitude of these revisions looks promising. Interestingly, the stock has a Zacks Rank #3 (Hold). We are expecting an inline return from the stock in the next few months.