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AbbVie (ABBV) to Report Q4 Earnings: What's in the Cards?

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AbbVie (ABBV - Free Report) will report fourth-quarter and full-year 2022 results on Feb 9, before market open. In the last reported quarter, the company delivered an earnings surprise of 2.81%.

This large drugmaker’s performance has been pretty impressive, with its earnings beating estimates in each of the trailing four quarters. The company has a four-quarter earnings surprise of 1.39%, on average.

AbbVie Inc. Price and EPS Surprise


AbbVie Inc. Price and EPS Surprise


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

AbbVie’s stock has increased 7.7% so far this year compared to the industry’s 1.9% growth.

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Factors to Consider

Strong demand for immunology and neuroscience products is expected to drive AbbVie’s fourth-quarter 2022 sales. Sales from these two portfolios generate more than half of the company’s total revenues. In addition, the company’s new drug launches in the past few quarters are likely to have generated additional sales in the fourth quarter. However, currency headwinds are likely to have hurt sales.

AbbVie’s immunology portfolio has been witnessing a strong surge in demand. We expect the company’s flagship drug Humira to register strong growth in the United States, which is more than likely to offset the downward trend in the drug’s international sales due to generic erosion. The Zacks Consensus Estimate and our model estimate for Humira are pegged at $5.58 billion and $5.54 billion, respectively.

On the earnings call, investors’ focus will likely be on AbbVie’s strategies around Humira following its potential loss of exclusivity in the United States, the impact of which will be seen in sales figures of first-quarter 2023. Last week, Amgen announced the launch of Amjevita, the first U.S. biosimilar to Humira. In fact, many other companies have also developed their own Humira biosimilars which are expected to be launched throughout this year. The impact of these biosimilars on Humira sales will be seen in subsequent quarters.

The company’s new immunology drugs, Skyrizi and Rinvoq, registered strong growth in the past few quarters. The drugs contributed more than $5.3 billion in combined sales in the first nine months of 2022. The rise in sales is due to label expansions of both drugs to include new patient populations in the last few quarters. Sales of the two drugs are expected to have remained strong during the fourth quarter. During the fourth quarter, Rinvoq received FDA approval for a sixth indication in active non-radiographic axial spondyloarthritis, while Skyrizi received label expansions in European Union for Crohn’s disease indication. The Zacks Consensus Estimate for Rinvoq and Skyrizi sales in the fourth quarter are pegged at $868 million and $1.55 billion, respectively.

AbbVie markets Imbruvica in partnership with Johnson & Johnson (JNJ - Free Report) and Venclexta in partnership with Roche (RHHBY - Free Report) . We expect JNJ-partnered Imbruvica sales to decline due to novel oral therapies hurting the drug’s sales, while Roche-partnered Venclexta sales are likely to rise as new patient starts are expected to improve. Both the Zacks Consensus Estimate and our model estimates for the J&J-partnered drug are pegged at $1.12 billion. For the Roche-partnered drug, the Zacks Consensus Estimate and our model estimates stand at $529 million and $534 million, respectively.

In the aesthetics franchise, we expect both Botox and Juvederm sales to fall as economic pressure is impacting consumers' discretionary spending. ABBV’s suspension of its aesthetics business operations in Russia has also affected the company’s sales, as Russia is a key market for fillers. The Zacks Consensus Estimate and our model estimate for aesthetics product sales stand at $1.28 billion and $1.25 billion, respectively.

Sales of the neuroscience franchise have shown strong growth in recent quarters, with additional sales generated by the recently approved migraine drugs Ubrelvy and Qulipta. The trend is expected to have continued for the franchise in the soon-to-be-reported quarter. The Zacks Consensus Estimate and our model estimate suggest neuroscience product sales at $1.90 billion and $1.93 billion, respectively.

Investor focus is also expected to be on the rising competition for other drugs, including Imbruvica, on the earnings call. They are also likely to ask for updates on management’s financial guidance for 2023.

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, which is not the case here, as you will see below. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter.

Earnings ESP: Earnings ESP, which represents the difference between the Most Accurate Estimate and the Zacks Consensus Estimate, is 0.00% as both stands at $3.54 per share.

Zacks Rank: AbbVie currently carries a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.

Stocks to Consider

Here is a large drug stock that has the right combination of elements to beat on earnings this time around:

Bayer (BAYRY - Free Report) has an Earnings ESP of +6.70% and a Zacks Rank #3. You can the complete list of today’s Zacks #1 Rank stocks here.

Bayer’s stock has risen 0.7% this year so far. Bayer beat earnings estimates in three of the last four quarters while missing the mark on one occasion. Bayer has a four-quarter earnings surprise of 18.23%, on average. BAYRY is scheduled to release its fourth-quarter 2022 results on Feb 28.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.

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