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AbbVie (ABBV) Beats on Q3 Earnings & Sales, Ups 2020 Guidance

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AbbVie Inc. (ABBV - Free Report) reported earnings of $2.83 per share for the third quarter of 2020, comfortably beating the Zacks Consensus Estimate of $2.75 and exceeding the guided range of $2.73-$2.74. Earnings rose 21.5% year over year.

Meanwhile, the company’s revenues of $12.9 billion beat the Zacks Consensus Estimate of $12.67 billion. The top line improved 52.1% year over year on a reported basis. However, on an operational basis, revenues increased 4.1%.

Please note that AbbVie completed the acquisition of Allergan in May 2020. Revenues include the first full-quarter of Allergan’s product revenues. AbbVie represented sales numbers as reported as well as on “comparable operational” basis, which included prior-year sales of Allergan’s products, as the acquisition closed on Jan 1, 2019, at constant currency rates.

AbbVie’s shares were up 1.4% in pre-market trading. AbbVie’s shares have gained 1.3% so far this year against the industry’s 1.7% decrease.

 

Quarter in Detail

Key drug Humira recorded sales increase of 4.4% on an operational basis with revenues from the same coming in at $5.14 billion. Sales in the United States climbed 7.7% to $4.19 billion. However, Humira sales in the ex-U.S. markets were down 8% on an operational basis and 9.3% on a reported basis to $951 million. International sales were affected by the launch of several direct biosimilar drugs in Europe by other pharma companies including Amgen (AMGN - Free Report) , Sandoz and Biogen.

New immunology drugs, Skyrizi and Rinvoq registered sales of $435 million and $215 million, respectively. In the previous quarter, Skyrizi and Rinvoq recorded sales of $330 million and $149 million, respectively. Strong sequential growth in sales of both drugs in the past couple of quarter reflects strong uptake.

AbbVie’s oncology/hematology (including Imbruvica and Venclexta) sales rose 16.4% on an operational basis to $1.72 billion in the quarter, driven by strong growth of both Imbruvica and Venclexta.

Third-quarter net revenues from Imbruvica were $1.37 billion, up 9% year over year. U.S. sales of Imbruvica grossed $1.12 billion, up 7.4% from the year-ago figure. AbbVie’s share of profit from International sales of the drug rose 17% to $251 million. Notably, AbbVie shares international profits earned from Imbruvica with Johnson & Johnson (JNJ - Free Report) .

The company’s leukemia drug Venclexta generated revenues of $352 million in the reported quarter, reflecting growth of 58.3% year over year on an operational basis. AbbVie has a partnership with Roche (RHHBY - Free Report) for Venclexta.

Other products that delivered an encouraging performance include Creon and Duodopa, which recorded revenue growth of 5.9% and 2%, respectively, on an operational basis. Lupron and Synthroid witnessed a revenue decrease of 41.3% and 3.6%, respectively. Orilissa sales were down 3.2% year over year. Sales of Mavyret were $414 million, down 41.1% operationally.

AbbVie added several drugs to its portfolio with the acquisition of Allergan. Key among them include multi-indication drug, Botox, and Vraylar. Botox is sold as a cosmetic as well as therapeutic. Botox Cosmetic net revenues were $393 million, down 2.2% on an operational basis. Botox Therapeutic net revenues decreased 1.8% to $523 million. However, Vraylar sales were up 48.4% to $358 million.

Adjusted SG&A expenses increased 68% to $2.72 billion while R&D expenses were $1.51 billion in the third quarter, rising 23.3% year over year. Adjusted operating margin represented 48.8% of sales.

2020 Guidance

AbbVie issued new EPS guidance for 2020, which includes results of Allergan from May 8 to Dec 31. The company now expects adjusted EPS to be in the range of $10.47-$10.49 compared with $10.35-$10.45 expected previously. The increase in earnings expectations reflect recovery in demand for AbbVie’s products following COVID-19 related disruption in the second quarter. The Zacks Consensus Estimate for current-year earnings per share is pegged at $10.42.

AbbVie Inc. Price, Consensus and EPS Surprise

AbbVie Inc. Price, Consensus and EPS Surprise

AbbVie Inc. price-consensus-eps-surprise-chart | AbbVie Inc. Quote

Zacks Rank

Currently, AbbVie is a Zacks Rank #3 (Hold) stock.You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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