As the first half of the year draws to a close, investors are looking forward to the second-quarter earnings season, which kick-started on a rather encouraging note earlier this month. As per our
Earnings Trend report, approximately 32 S&P 500 members (representing 7.6% of the index’s total market capitalization) have reported quarterly results so far. Out of these, 65.6% recorded an earnings beat, while 43.8% were able to top sales estimates. The recent turnaround in oil prices and fading effects of dollar strength led to modest negative revisions for the quarter, which in turn, may lead to better-than-expected results. However, total earnings are estimated to be down 5.9% on a year-over-year basis. What Awaits Healthcare Stocks?
Medical is one of the few sectors that are poised to report earnings growth this quarter. While the sector’s second-quarter earnings are projected to improve 0.5%, revenues are expected to grow 7.7%. Among the big names of the sector, Swiss oncology major Novartis AG (
NVS - Free Report) was able to beat estimates.
Let’s find out what’s in store for a few companies scheduled to report results later this week.
Illinois-based Abbott Laboratories (
ABT - Free Report) is scheduled to report second-quarter results before the opening bell on Jul 20. The company has a diversified portfolio that was reshaped through strategic acquisitions/divestitures in recent times. Abbott Labs has an impressive track record so far, having surpassed estimates in each of the four trailing quarters with an average earnings surprise of 3.17%. Strengthening of the dollar against almost every other currency has been denting the company’s performance over the past few quarters. However, strong first-quarter results, along with an improving exchange rate outlook, led to a raised earnings guidance for 2016. Nevertheless, the combination of Abbott Labs’ Zacks Rank #3 (Hold) and a 0.00% Earnings ESP makes surprise prediction difficult (read more: Abbott Labs Q2 Earnings: Will the Stock Surprise?).
Multiple sclerosis (MS) market leader Biogen Inc. (
BIIB - Free Report) is scheduled to report second-quarter results on Jul 21. Biogen has beaten expectations in all of the past four quarters, bringing the average earnings surprise to 9.54%. However, the company currently carries a Zacks Rank #3 and an Earnings ESP of -1.92%, making it difficult to conclusively predict an earnings beat this quarter. The first progressive multifocal leukoencephalopathy (PML)-related death of a patient using oral MS drug, Tecfidera, brought the drug under the spotlight and we expect investor focus to remain on the same (read more: Biogen Q2 Earnings: Will the Stock Disappoint?).
Switzerland-based Actelion Ltd. is scheduled to report first-half results on Jul 21. The company boasts a leading franchise in pulmonary arterial hypertension with drugs like Tracleer, Ventavis, Veletri and Opsumit. The company has an impressive track record, having beaten expectations in each of the four quarters with an average beat of 12.37%. The company currently carries a Zacks Rank #3, which when combined with its 0.00% Earnings ESP, makes surprise prediction difficult.
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