Total earnings of the 79.7% of the entire healthcare market capitalization that has reported so far are up 7.1% on revenue growth of 8.2%. The earnings and revenue growth rates seem to be the fourth highest among all the sectors. Earnings and revenue beat ratios of 80.6% and 86.1%, respectively also appear strong.
Most industry bigwigs delivered encouraging results, either beating on earnings or revenues or both and also raised revenue or earnings guidance or both. Let’s delve into a few of them:
Earnings in FocusJohnson and Johnson
The world's biggest healthcare products maker continued its long streak of earnings beat. It also outpaced revenue estimates. Earnings per share came in at $2.12, 12 cents ahead of the Zacks Consensus Estimate and 3.4% higher than the year-ago quarter. Revenues grew 1.9% year over year to $20.7 billion and edged past the Zacks Consensus Estimate of $20.1 billion. For 2019, Johnson & Johnson raised its sales forecast to $81.8-$82.3 billion from $80.8-$81.6 billion, which represents 0.2%-0.7% year-over-year growth, on robust demand for its cancer drugs. It also upped its earnings per share guidance to $8.62-$8.67 from $8.53-$8.63, representing year-over-year growth of 5.4-6% (read: JNJ Beats, Ups View: Healthcare ETFs to Buy).
Pfizer
Earnings per share of 75 cents were 12 cents above the Zacks Consensus Estimate and revenues of $12.68 billion also edged past the consensus mark of $12.15 billion. On a year-over-year basis, earnings per share and revenues declined 2% and 5%, respectively. For 2019, the U.S. drug giant revised sales guidance to $51.2-$52.2 billion from $50.5-$52.5 billion and earnings per share to $2.94-$3.00 from $2.76-$2.86.
Merck
Earnings per share of $1.51 surpassed the Zacks Consensus Estimate of $1.25 and also improved 27% from the year-ago quarter. Moreover, revenues grew 15% year over year to $12.4 billion, edging past the consensus mark of $11.7 billion. Merck increased its revenue projection from $45.2-$46.2 billion to $46.5-$47 billion for this year and earnings per share view from $4.84-$4.94 to $5.12-$5.17 (read: Value Biotech ETFs & Stocks to Buy Now).
Bristol-Myers
Bristol-Myers’s earnings per share of $1.17 beat the Zacks Consensus Estimate by 11 cents and also rose from the year-ago figure of $1.09. Revenues grew 6% year over year to $6 billion and also trumped the Zacks Consensus Estimate of $5.8 billion. The company lifted its earnings per share guidance to $4.25-$4.35 from $4.20-$4.30.
Eli Lilly
Eli Lilly delivered better-than-expected earnings but lagged on revenues. Earnings of $1.48 per share were 5 cents ahead of the Zacks Consensus Estimate and came in 10% higher than the year-earlier quarter. Revenues grew 3% to $5.48 billion but fell short of the estimated $5.56 billion. While Eli Lilly maintained its 2019 revenue guidance of $22-$22.5 billion, it raised its earnings prediction to $5.75-$5.85 from $5.67-$5.77.
ETF Angle
Robust results led to solid trading in pharma ETFs in a month. Below, we have highlighted those in detail (see: all the Healthcare ETFs here).
iShares U.S. Pharmaceuticals ETF (IHE - Free Report)
This ETF provides exposure to 45 pharma stocks by tracking the Dow Jones U.S. Select Pharmaceuticals Index. The in-focus firms are the top 10 holdings in the basket, accounting for 56.8% of the total assets, suggesting heavy concentration. The product has $334.9 million in AUM and charges 42 bps in fees and expense. Volume is light as it exchanges about 17,000 shares a day. The fund has added 4.3% in a month and has a Zacks ETF Rank #3 (Hold) with a High risk outlook.
First Trust Nasdaq Pharmaceuticals ETF (FTXH - Free Report)
This fund tracks the Nasdaq US Smart Pharmaceuticals Index, holding 30 securities in its basket. The in-focus firms account for a combined 32% of the assets. FTXH has a lower level of $8.5 million in AUM and 2,000 shares in average daily volume. It charges 60 bps in annual fees and is up 5.1% in the same time frame. The product has a Zacks ETF Rank #3.
SPDR S&P Pharmaceuticals ETF (XPH - Free Report)
This fund provides exposure to pharma companies by tracking the S&P Pharmaceuticals Select Industry Index. With AUM of $187.2 million, it trades in good volume of around 71,000 shares a day and charges 35 bps in fees a year. In total, the product holds 39 securities with the in-focus five firms making up for at least 4% share each. The product has gained 12.2% in the same period and has a Zacks ETF Rank #3 with a High risk outlook (read: Healthcare ETFs Win in October: Here's Why).
VanEck Vectors Pharmaceutical ETF (PPH - Free Report)
This ETF follows the MVIS US Listed Pharmaceutical 25 Index and holds 25 stocks in its basket. The in-focus five firms account for a nearly 5% share each. The product has amassed $179.1 million in its asset base and trades in moderate volume of about 46,000 shares a day. Expense ratio is 0.36%. The fund has gained 7.5% of value in a month and has a Zacks ETF Rank #3 with a Medium risk outlook.
Invesco Dynamic Pharmaceuticals ETF (PJP - Free Report)
This is by far the most-popular choice in the pharma space that follows the Dynamic Pharmaceuticals Intellidex Index. The product has AUM of about $362.3 million and sees a lower volume of around 40,000 shares a day. The fund charges 56 bps in fees and expenses. Holding 30 stocks, the fund invests nearly 5% share each in the five firms. The ETF has gained 8% in a month and has Zacks ETF Rank #3 with a High risk outlook.
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Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
Total earnings of the 79.7% of the entire healthcare market capitalization that has reported so far are up 7.1% on revenue growth of 8.2%. The earnings and revenue growth rates seem to be the fourth highest among all the sectors. Earnings and revenue beat ratios of 80.6% and 86.1%, respectively also appear strong.
Most industry bigwigs delivered encouraging results, either beating on earnings or revenues or both and also raised revenue or earnings guidance or both. Let’s delve into a few of them:
Earnings in Focus
Johnson and Johnson
The world's biggest healthcare products maker continued its long streak of earnings beat. It also outpaced revenue estimates. Earnings per share came in at $2.12, 12 cents ahead of the Zacks Consensus Estimate and 3.4% higher than the year-ago quarter. Revenues grew 1.9% year over year to $20.7 billion and edged past the Zacks Consensus Estimate of $20.1 billion. For 2019, Johnson & Johnson raised its sales forecast to $81.8-$82.3 billion from $80.8-$81.6 billion, which represents 0.2%-0.7% year-over-year growth, on robust demand for its cancer drugs. It also upped its earnings per share guidance to $8.62-$8.67 from $8.53-$8.63, representing year-over-year growth of 5.4-6% (read: JNJ Beats, Ups View: Healthcare ETFs to Buy).
Pfizer
Earnings per share of 75 cents were 12 cents above the Zacks Consensus Estimate and revenues of $12.68 billion also edged past the consensus mark of $12.15 billion. On a year-over-year basis, earnings per share and revenues declined 2% and 5%, respectively. For 2019, the U.S. drug giant revised sales guidance to $51.2-$52.2 billion from $50.5-$52.5 billion and earnings per share to $2.94-$3.00 from $2.76-$2.86.
Merck
Earnings per share of $1.51 surpassed the Zacks Consensus Estimate of $1.25 and also improved 27% from the year-ago quarter. Moreover, revenues grew 15% year over year to $12.4 billion, edging past the consensus mark of $11.7 billion. Merck increased its revenue projection from $45.2-$46.2 billion to $46.5-$47 billion for this year and earnings per share view from $4.84-$4.94 to $5.12-$5.17 (read: Value Biotech ETFs & Stocks to Buy Now).
Bristol-Myers
Bristol-Myers’s earnings per share of $1.17 beat the Zacks Consensus Estimate by 11 cents and also rose from the year-ago figure of $1.09. Revenues grew 6% year over year to $6 billion and also trumped the Zacks Consensus Estimate of $5.8 billion. The company lifted its earnings per share guidance to $4.25-$4.35 from $4.20-$4.30.
Eli Lilly
Eli Lilly delivered better-than-expected earnings but lagged on revenues. Earnings of $1.48 per share were 5 cents ahead of the Zacks Consensus Estimate and came in 10% higher than the year-earlier quarter. Revenues grew 3% to $5.48 billion but fell short of the estimated $5.56 billion. While Eli Lilly maintained its 2019 revenue guidance of $22-$22.5 billion, it raised its earnings prediction to $5.75-$5.85 from $5.67-$5.77.
ETF Angle
Robust results led to solid trading in pharma ETFs in a month. Below, we have highlighted those in detail (see: all the Healthcare ETFs here).
iShares U.S. Pharmaceuticals ETF (IHE - Free Report)
This ETF provides exposure to 45 pharma stocks by tracking the Dow Jones U.S. Select Pharmaceuticals Index. The in-focus firms are the top 10 holdings in the basket, accounting for 56.8% of the total assets, suggesting heavy concentration. The product has $334.9 million in AUM and charges 42 bps in fees and expense. Volume is light as it exchanges about 17,000 shares a day. The fund has added 4.3% in a month and has a Zacks ETF Rank #3 (Hold) with a High risk outlook.
First Trust Nasdaq Pharmaceuticals ETF (FTXH - Free Report)
This fund tracks the Nasdaq US Smart Pharmaceuticals Index, holding 30 securities in its basket. The in-focus firms account for a combined 32% of the assets. FTXH has a lower level of $8.5 million in AUM and 2,000 shares in average daily volume. It charges 60 bps in annual fees and is up 5.1% in the same time frame. The product has a Zacks ETF Rank #3.
SPDR S&P Pharmaceuticals ETF (XPH - Free Report)
This fund provides exposure to pharma companies by tracking the S&P Pharmaceuticals Select Industry Index. With AUM of $187.2 million, it trades in good volume of around 71,000 shares a day and charges 35 bps in fees a year. In total, the product holds 39 securities with the in-focus five firms making up for at least 4% share each. The product has gained 12.2% in the same period and has a Zacks ETF Rank #3 with a High risk outlook (read: Healthcare ETFs Win in October: Here's Why).
VanEck Vectors Pharmaceutical ETF (PPH - Free Report)
This ETF follows the MVIS US Listed Pharmaceutical 25 Index and holds 25 stocks in its basket. The in-focus five firms account for a nearly 5% share each. The product has amassed $179.1 million in its asset base and trades in moderate volume of about 46,000 shares a day. Expense ratio is 0.36%. The fund has gained 7.5% of value in a month and has a Zacks ETF Rank #3 with a Medium risk outlook.
Invesco Dynamic Pharmaceuticals ETF (PJP - Free Report)
This is by far the most-popular choice in the pharma space that follows the Dynamic Pharmaceuticals Intellidex Index. The product has AUM of about $362.3 million and sees a lower volume of around 40,000 shares a day. The fund charges 56 bps in fees and expenses. Holding 30 stocks, the fund invests nearly 5% share each in the five firms. The ETF has gained 8% in a month and has Zacks ETF Rank #3 with a High risk outlook.
Want key ETF info delivered straight to your inbox?
Zacks’ free Fund Newsletter will brief you on top news and analysis, as well as top-performing ETFs, each week. Get it free >>
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
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