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AstraZeneca (AZN) to Report Q2 Earnings: What's in the Cards?
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We expect AstraZeneca (AZN - Free Report) to beat expectations when it reports second-quarter 2023 results on Jul 28. In the last reported quarter, the company delivered an earnings surprise of 11.63%.
Factors to Consider
Sales of AstraZeneca’s key medicines, mainly cancer drugs — Lynparza, Tagrisso and Imfinzi — and diabetes medicine Farxiga are expected to have driven the company’s second-quarter sales, backed by strong demand trends.
Our model estimates for Lynparza, Tagrisso and Imfinzi are pegged at $845 million, $1.55 billion and $843 million, respectively. The Zacks Consensus Estimate for Lynparza, Tagrisso and Imfinzi is pegged at $756 million, $1.49 billion and $922 million, respectively.
AstraZeneca markets Lynparza in partnership with Merck (MRK - Free Report) . AstraZeneca and Merck formed a profit-sharing deal to co-market Lynparza and Koselugo in July 2017.
AstraZeneca/Merck’s Lynparza is approved for four cancer types, ovarian, breast, prostate and pancreatic. The Merck-partnered drug is also being evaluated in an earlier-line setting for approved cancer indications.
At the onset of this year, the FDA withdrew the emergency-use authorization granted to Evusheld, AstraZeneca’s antibody cocktail medicine for COVID-19. Per the agency, Evusheld does not neutralize Omicron subvariants that are in circulation and responsible for more than 90% of COVID cases in the United States. Based on this decision, we do not expect the company to record any Evusheld product sales. Also, sales contribution of the COVID-19 vaccine, Vaxzevria is likely to have been minimum due to the conclusion of many initial contracts.
Since there has been a significant decline in the COVID-19 product sales of the company, we expect overall sales in the Vaccines & Immune (V&I) Therapies segment to be modest. Our model estimate for V&I Therapies segment are pegged at $83 million.
AstraZeneca’s other drugs, Fasenra, Calquence and newer products, the triple combo COPD treatment Breztri and lupus drug, Saphnelo (anifrolumab), are likely to have contributed to sales growth in the soon-to-be-reported quarter. Sales of key respiratory medicine, Symbicort are likely to have been hurt by pricing pressure in Europe and the United States and generic erosion in Japan.
The Zacks Consensus Estimates for Fasenra and Calquence is pegged at $396 million and $632 million, respectively. Our model estimates for Fasenra and Calquence revenues are pegged at $417 million and $689 million, respectively.
Sales of AstraZeneca’s legacy drugs,such as Iressa, Faslodex, Arimidex and Casodex, have been declining due to rising generic competition. The trend is likely to have continuedin the soon-to-be-reported quarter.
Sales in AstraZeneca’s Rare Disease drugs, which were added following the Alexion acquisition in 2021, have registered significant growth in recent quarters on the back of strong demand and geographic expansions for Ultomiris and Strensiq. This trend is likely to have continued in the to-be-reported quarter. Our model estimates for Ultomiris and Strensiq revenues are pegged at $745 million and $279 million, respectively.
During the first quarter, overall sales in China started showing recovery. This can be attributed to rising patient demand, which offset the National Reimbursement Drug List renewal price reductions. We expect this positive trend to continue in the second quarter.
Collaboration revenues are expected to have been an important contributor to the topline. Our model estimates for collaboration revenues are pegged at $617.0 million.
AstraZeneca expects a rise in core operating costs during the second quarter, driven by higher SG&A expenses. R&D expenses are expected in the low 20s percentage of total revenues.
Last month, a third-party article claimed that AstraZeneca is in the process of drafting plans to spin-off its China business and list it there to hedge itself against geopolitical risk. Investors would also like to seek updates on the same at the second-quarter conference call.
Earnings Surprise History
The British drugmaker’s performance was impressive, with earnings beating estimates in each of the last four quarters. The company delivered a four-quarter earnings surprise of 8.11%, on average.
In the year so far, AstraZeneca’s shares have increased 2.3% compared with a 3.3% rise of the industry.
Image Source: Zacks Investment Research
Earnings Whispers
Our proven model predicts an earnings beat for AstraZeneca in the to-be-reported quarter. A stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for a likely positive surprise. This is the case here, as elaborated below.
Earnings ESP: AstraZeneca’s Earnings ESP is +1.88% as the Zacks Consensus Estimate of 98 cents per ADR is less than the Most Accurate Estimate of $1.00. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Here are some large biotech stocks that also have the right combination of elements to beat on earnings this time around:
GSK (GSK - Free Report) has an Earnings ESP of +0.59% and a Zacks Rank #3.
GSK’s stock has inched up 1.7% in the year-to-date period. GSK beat earnings estimates in each of the last four quarters, delivering an earnings surprise of 12.48%, on average. GSK will report its second-quarter results on Jul 26.
Moderna (MRNA - Free Report) has an Earnings ESP of +2.83% and a Zacks Rank #3.
Moderna’s stock has declined 29.6% this year so far. MRNA beat earnings estimates in two of the last four quarters while missing in the other two. Moderna has a four-quarter earnings surprise of 21.97%, on average. Moderna is scheduled to release its second-quarter results on Aug 3, before the opening bell.
Image: Bigstock
AstraZeneca (AZN) to Report Q2 Earnings: What's in the Cards?
We expect AstraZeneca (AZN - Free Report) to beat expectations when it reports second-quarter 2023 results on Jul 28. In the last reported quarter, the company delivered an earnings surprise of 11.63%.
Factors to Consider
Sales of AstraZeneca’s key medicines, mainly cancer drugs — Lynparza, Tagrisso and Imfinzi — and diabetes medicine Farxiga are expected to have driven the company’s second-quarter sales, backed by strong demand trends.
Our model estimates for Lynparza, Tagrisso and Imfinzi are pegged at $845 million, $1.55 billion and $843 million, respectively. The Zacks Consensus Estimate for Lynparza, Tagrisso and Imfinzi is pegged at $756 million, $1.49 billion and $922 million, respectively.
AstraZeneca markets Lynparza in partnership with Merck (MRK - Free Report) . AstraZeneca and Merck formed a profit-sharing deal to co-market Lynparza and Koselugo in July 2017.
AstraZeneca/Merck’s Lynparza is approved for four cancer types, ovarian, breast, prostate and pancreatic. The Merck-partnered drug is also being evaluated in an earlier-line setting for approved cancer indications.
At the onset of this year, the FDA withdrew the emergency-use authorization granted to Evusheld, AstraZeneca’s antibody cocktail medicine for COVID-19. Per the agency, Evusheld does not neutralize Omicron subvariants that are in circulation and responsible for more than 90% of COVID cases in the United States. Based on this decision, we do not expect the company to record any Evusheld product sales. Also, sales contribution of the COVID-19 vaccine, Vaxzevria is likely to have been minimum due to the conclusion of many initial contracts.
Since there has been a significant decline in the COVID-19 product sales of the company, we expect overall sales in the Vaccines & Immune (V&I) Therapies segment to be modest. Our model estimate for V&I Therapies segment are pegged at $83 million.
AstraZeneca’s other drugs, Fasenra, Calquence and newer products, the triple combo COPD treatment Breztri and lupus drug, Saphnelo (anifrolumab), are likely to have contributed to sales growth in the soon-to-be-reported quarter. Sales of key respiratory medicine, Symbicort are likely to have been hurt by pricing pressure in Europe and the United States and generic erosion in Japan.
The Zacks Consensus Estimates for Fasenra and Calquence is pegged at $396 million and $632 million, respectively. Our model estimates for Fasenra and Calquence revenues are pegged at $417 million and $689 million, respectively.
Sales of AstraZeneca’s legacy drugs,such as Iressa, Faslodex, Arimidex and Casodex, have been declining due to rising generic competition. The trend is likely to have continuedin the soon-to-be-reported quarter.
Sales in AstraZeneca’s Rare Disease drugs, which were added following the Alexion acquisition in 2021, have registered significant growth in recent quarters on the back of strong demand and geographic expansions for Ultomiris and Strensiq. This trend is likely to have continued in the to-be-reported quarter. Our model estimates for Ultomiris and Strensiq revenues are pegged at $745 million and $279 million, respectively.
During the first quarter, overall sales in China started showing recovery. This can be attributed to rising patient demand, which offset the National Reimbursement Drug List renewal price reductions. We expect this positive trend to continue in the second quarter.
Collaboration revenues are expected to have been an important contributor to the topline. Our model estimates for collaboration revenues are pegged at $617.0 million.
AstraZeneca expects a rise in core operating costs during the second quarter, driven by higher SG&A expenses. R&D expenses are expected in the low 20s percentage of total revenues.
Last month, a third-party article claimed that AstraZeneca is in the process of drafting plans to spin-off its China business and list it there to hedge itself against geopolitical risk. Investors would also like to seek updates on the same at the second-quarter conference call.
Earnings Surprise History
The British drugmaker’s performance was impressive, with earnings beating estimates in each of the last four quarters. The company delivered a four-quarter earnings surprise of 8.11%, on average.
AstraZeneca PLC Price and EPS Surprise
AstraZeneca PLC price-eps-surprise | AstraZeneca PLC Quote
In the year so far, AstraZeneca’s shares have increased 2.3% compared with a 3.3% rise of the industry.
Image Source: Zacks Investment Research
Earnings Whispers
Our proven model predicts an earnings beat for AstraZeneca in the to-be-reported quarter. A stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for a likely positive surprise. This is the case here, as elaborated below.
Earnings ESP: AstraZeneca’s Earnings ESP is +1.88% as the Zacks Consensus Estimate of 98 cents per ADR is less than the Most Accurate Estimate of $1.00. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: AstraZeneca currently carries a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.
Other Stocks to Consider
Here are some large biotech stocks that also have the right combination of elements to beat on earnings this time around:
GSK (GSK - Free Report) has an Earnings ESP of +0.59% and a Zacks Rank #3.
GSK’s stock has inched up 1.7% in the year-to-date period. GSK beat earnings estimates in each of the last four quarters, delivering an earnings surprise of 12.48%, on average. GSK will report its second-quarter results on Jul 26.
Moderna (MRNA - Free Report) has an Earnings ESP of +2.83% and a Zacks Rank #3.
Moderna’s stock has declined 29.6% this year so far. MRNA beat earnings estimates in two of the last four quarters while missing in the other two. Moderna has a four-quarter earnings surprise of 21.97%, on average. Moderna is scheduled to release its second-quarter results on Aug 3, before the opening bell.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.