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Will Recovery in AbbVie's (ABBV) Earnings Continue in Q4?
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AbbVie, Inc. (ABBV - Free Report) will report fourth-quarter 2020 results on Feb 3, before market open. In the last reported quarter, the company delivered an earnings surprise of 2.91%.
The large drugmaker’s performance has been pretty impressive, with earnings beat in each of the trailing four quarters. The company has a four-quarter earnings surprise of 3.61%, on average.
AbbVie’s stock has gained 27.5% in the past year compared with the increase of 6.4% for the industry.
Factors to Consider
The company’s business has been recovering from the negative impact of coronavirus with the re-opening of the U.S. economy. However, some drugs have been facing demand disruptions due to lower new patient starts amid the pandemic. We expect this to have had an impact on fourth-quarter performance.
Fourth-quarter earnings are expected between $2.83 and $2.85 per share. AbbVie guided adjusted revenues of approximately $13.8 billion.
In immunology, Humira’s demand in the United States remained high despite lower new patient starts. We expect U.S. sales of the drug to have increased in the fourth quarter. However, Humira’s international sales are likely to have declined significantly due to the impact of biosimilars in Europe. The Zacks Consensus Estimate for Humira stands at $5.13 billion.
Meanwhile, third-quarter sales of new immunology drugs, Skyrizi and Rinvoq, reflected strong uptake. The strong uptake is expected to have continued in the soon-to-be-reported quarter.
In oncology, AbbVie markets Imbruvica in partnership with Johnson & Johnson (JNJ - Free Report) and Venclexta in partnership with Roche. Sales of the drugs are likely to have been strong in the soon-to-be reported quarter. We note that both drugs witnessed solid demand in the third quarter. However, Imbruvica new patient starts in the CLL indication remained below pre-COVID levels. The Zacks Consensus Estimate for Imbruvica and Venclexta is $1.43 billion and $375 million, respectively.
AbbVie’s new HCV drug, Mavyret, recorded a significant decline in the past couple of quarters due to lower patient volumes amid COVID pandemic as well as rising competition. The extent of the impact of the resurgence of COVID-19 infection cases on fourth-quarter sales remains to be seen when the company reports. The Zacks Consensus Estimate for Mavyret stands at $479 million.
Sales of Allergan’s aesthetics products and Botox therapeutics have been improving as the aesthetics franchise experienced a faster-than-expected recovery from the COVID-19 pandemic, reflecting significant pent-up demand. The Zacks Consensus Estimate for aesthetics products stands at $1.07 billion.
Adjusted operating margin is expected to be approximately 45.6% of sales in the fourth quarter.
Meanwhile, investor focus will be on AbbVie’s financial guidance for 2021 on the fourth-quarter conference call amid resurgence of COVID-19 infection cases.
Earnings Whispers
Our proven model does not conclusively predict an earnings beat for AbbVie this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that is not the case here.
Earnings ESP: Earnings ESP, which represents the difference between the Most Accurate Estimate of $2.85 per share and the Zacks Consensus Estimate of $2.86, is -0.24%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Merck (MRK - Free Report) has an Earnings ESP of +2.21% and a Zacks Rank #2.
The Hottest Tech Mega-Trend of All
Last year, it generated $24 billion in global revenues. By 2020, it's predicted to blast through the roof to $77.6 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
Image: Bigstock
Will Recovery in AbbVie's (ABBV) Earnings Continue in Q4?
AbbVie, Inc. (ABBV - Free Report) will report fourth-quarter 2020 results on Feb 3, before market open. In the last reported quarter, the company delivered an earnings surprise of 2.91%.
The large drugmaker’s performance has been pretty impressive, with earnings beat in each of the trailing four quarters. The company has a four-quarter earnings surprise of 3.61%, on average.
AbbVie’s stock has gained 27.5% in the past year compared with the increase of 6.4% for the industry.
Factors to Consider
The company’s business has been recovering from the negative impact of coronavirus with the re-opening of the U.S. economy. However, some drugs have been facing demand disruptions due to lower new patient starts amid the pandemic. We expect this to have had an impact on fourth-quarter performance.
Fourth-quarter earnings are expected between $2.83 and $2.85 per share. AbbVie guided adjusted revenues of approximately $13.8 billion.
In immunology, Humira’s demand in the United States remained high despite lower new patient starts. We expect U.S. sales of the drug to have increased in the fourth quarter. However, Humira’s international sales are likely to have declined significantly due to the impact of biosimilars in Europe. The Zacks Consensus Estimate for Humira stands at $5.13 billion.
Meanwhile, third-quarter sales of new immunology drugs, Skyrizi and Rinvoq, reflected strong uptake. The strong uptake is expected to have continued in the soon-to-be-reported quarter.
In oncology, AbbVie markets Imbruvica in partnership with Johnson & Johnson (JNJ - Free Report) and Venclexta in partnership with Roche. Sales of the drugs are likely to have been strong in the soon-to-be reported quarter. We note that both drugs witnessed solid demand in the third quarter. However, Imbruvica new patient starts in the CLL indication remained below pre-COVID levels. The Zacks Consensus Estimate for Imbruvica and Venclexta is $1.43 billion and $375 million, respectively.
AbbVie’s new HCV drug, Mavyret, recorded a significant decline in the past couple of quarters due to lower patient volumes amid COVID pandemic as well as rising competition. The extent of the impact of the resurgence of COVID-19 infection cases on fourth-quarter sales remains to be seen when the company reports. The Zacks Consensus Estimate for Mavyret stands at $479 million.
Sales of Allergan’s aesthetics products and Botox therapeutics have been improving as the aesthetics franchise experienced a faster-than-expected recovery from the COVID-19 pandemic, reflecting significant pent-up demand. The Zacks Consensus Estimate for aesthetics products stands at $1.07 billion.
Adjusted operating margin is expected to be approximately 45.6% of sales in the fourth quarter.
Meanwhile, investor focus will be on AbbVie’s financial guidance for 2021 on the fourth-quarter conference call amid resurgence of COVID-19 infection cases.
Earnings Whispers
Our proven model does not conclusively predict an earnings beat for AbbVie this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that is not the case here.
Earnings ESP: Earnings ESP, which represents the difference between the Most Accurate Estimate of $2.85 per share and the Zacks Consensus Estimate of $2.86, is -0.24%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: AbbVie has a Zacks Rank #3.
AbbVie Inc. Price and EPS Surprise
AbbVie Inc. price-eps-surprise | AbbVie Inc. Quote
Stocks to Consider
Here are some large drug/biotech stocks that have the right combination of elements to beat on earnings this time around:
Eli Lilly (LLY - Free Report) has an Earnings ESP of +2.13% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.
Merck (MRK - Free Report) has an Earnings ESP of +2.21% and a Zacks Rank #2.
The Hottest Tech Mega-Trend of All
Last year, it generated $24 billion in global revenues. By 2020, it's predicted to blast through the roof to $77.6 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
See Zacks' 3 Best Stocks to Play This Trend >>