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AbbVie (ABBV) Q2 Earnings: Will the Stock Pull a Surprise?
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AbbVie Inc. (ABBV - Free Report) will be reporting second quarter 2016 earnings results on Jul 29 before the market opens.
AbbVie’s performance has been pretty impressive with the company beating earnings expectations in three of the last four quarters. The average earnings surprise over the last four quarters is +2.55%.
Focus on Humira, Imbruvica and the Stemcentrx Acquisition
On its first quarter call, AbbVie had said that it expects second quarter revenues to grow in mid-teens on an operational basis with currency expected to negatively impact revenues by about 2%. Key drug, Humira, should remain the main growth driver in the second quarter - growing awareness, strong underlying demand, favorable clinical data, additional indications and market share gains should help the product to continue contributing significantly to the top line.
However, second quarter ex-U.S. Humira sales are expected to decline modestly from the year-ago period reflecting a currency impact of about 4%. Operational growth of 3% is expected. Another factor to be considered for international Humira sales is the impact of Remicade and Enbrel biosimilars.
Another focus area will be the performance of Imbruvica which was added to AbbVie’s portfolio following its May 2015 acquisition of Pharmacyclics. Imbruvica has multi-billion dollar potential and the company is exploring the potential to expand Imbruvica’s label into solid tumors and autoimmune diseases.
Imbruvica sales should benefit from the FDA approval for the first-line treatment of patients with chronic lymphocytic leukemia (CLL). Moreover, the product should benefit from the updated National Comprehensive Cancer Network (NCCN) guidelines granting Imbruvica a category 1 recommendation for certain CLL patients, the highest recommendation assigned by the organization.
AbbVie is positioning Imbruvica as a “pipeline in a molecule” -- the treatment is currently in a wide range of studies. Imbruvica is partnered with Johnson & Johnson (JNJ - Free Report) , which recorded second quarter Imbruvica sales of $295 million.
Hepatitis C virus (HCV) treatment, Viekira, will continue to be impacted by the addition of liver injury warnings to the labels of AbbVie’s HCV treatments as well as the presence of new competition in the market.
Meanwhile, Duopa sales should ramp up eventually as physicians grow familiar with the product. Creon should also perform well with the product capturing the vast majority of new prescription starts in the pancreatic enzyme market.
AbbVie has entered into quite a few collaborations so far in 2016 including with companies like Boehringer Ingelheim, Bristol-Myers Squibb Company (BMY - Free Report) , argenx and CytomX in addition to the Stemcentrx acquisition. Details regarding the impact of the Stemcentrx acquisition on AbbVie's P&L profile should be available on the second quarter earnings call.
On its first quarter call, AbbVie had guided towards second quarter earnings per share of $1.19 - $1.21.
What Our Model Indicates
Our proven model does not conclusively show that AbbVie is likely to beat estimates this quarter. That is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), #2 (Buy) or #3 (Hold) to be able to beat earnings. That is not the case here as you will see below.
Zacks ESP: Earnings Surprise Prediction or Earnings ESP, which represents the difference between the Most Accurate estimate and the Zacks Consensus Estimate, is 0.00%.
Zacks Rank #3: AbbVie’s Zacks Rank #3 when combined with an ESP of 0.00% makes surprise prediction difficult.
Note that stocks with Zacks Ranks of #1, #2 and #3 have a significantly higher chance of beating earnings. The Sell-rated stocks (#4 and #5) should never be considered going into an earnings announcement.
The Earnings ESP for Amgen Inc. (AMGN - Free Report) is +1.10% and it carries a Zacks Rank #3. The company will release second-quarter results on Jul 27.
Intercept Pharmaceuticals, Inc. has an Earnings ESP of +7.45% and carries a Zacks Rank #3. It is expected to report second-quarter results on Aug 3.
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AbbVie (ABBV) Q2 Earnings: Will the Stock Pull a Surprise?
AbbVie Inc. (ABBV - Free Report) will be reporting second quarter 2016 earnings results on Jul 29 before the market opens.
AbbVie’s performance has been pretty impressive with the company beating earnings expectations in three of the last four quarters. The average earnings surprise over the last four quarters is +2.55%.
Focus on Humira, Imbruvica and the Stemcentrx Acquisition
On its first quarter call, AbbVie had said that it expects second quarter revenues to grow in mid-teens on an operational basis with currency expected to negatively impact revenues by about 2%. Key drug, Humira, should remain the main growth driver in the second quarter - growing awareness, strong underlying demand, favorable clinical data, additional indications and market share gains should help the product to continue contributing significantly to the top line.
However, second quarter ex-U.S. Humira sales are expected to decline modestly from the year-ago period reflecting a currency impact of about 4%. Operational growth of 3% is expected. Another factor to be considered for international Humira sales is the impact of Remicade and Enbrel biosimilars.
Another focus area will be the performance of Imbruvica which was added to AbbVie’s portfolio following its May 2015 acquisition of Pharmacyclics. Imbruvica has multi-billion dollar potential and the company is exploring the potential to expand Imbruvica’s label into solid tumors and autoimmune diseases.
Imbruvica sales should benefit from the FDA approval for the first-line treatment of patients with chronic lymphocytic leukemia (CLL). Moreover, the product should benefit from the updated National Comprehensive Cancer Network (NCCN) guidelines granting Imbruvica a category 1 recommendation for certain CLL patients, the highest recommendation assigned by the organization.
AbbVie is positioning Imbruvica as a “pipeline in a molecule” -- the treatment is currently in a wide range of studies. Imbruvica is partnered with Johnson & Johnson (JNJ - Free Report) , which recorded second quarter Imbruvica sales of $295 million.
Hepatitis C virus (HCV) treatment, Viekira, will continue to be impacted by the addition of liver injury warnings to the labels of AbbVie’s HCV treatments as well as the presence of new competition in the market.
Meanwhile, Duopa sales should ramp up eventually as physicians grow familiar with the product. Creon should also perform well with the product capturing the vast majority of new prescription starts in the pancreatic enzyme market.
AbbVie has entered into quite a few collaborations so far in 2016 including with companies like Boehringer Ingelheim, Bristol-Myers Squibb Company (BMY - Free Report) , argenx and CytomX in addition to the Stemcentrx acquisition. Details regarding the impact of the Stemcentrx acquisition on AbbVie's P&L profile should be available on the second quarter earnings call.
On its first quarter call, AbbVie had guided towards second quarter earnings per share of $1.19 - $1.21.
What Our Model Indicates
Our proven model does not conclusively show that AbbVie is likely to beat estimates this quarter. That is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), #2 (Buy) or #3 (Hold) to be able to beat earnings. That is not the case here as you will see below.
Zacks ESP: Earnings Surprise Prediction or Earnings ESP, which represents the difference between the Most Accurate estimate and the Zacks Consensus Estimate, is 0.00%.
Zacks Rank #3: AbbVie’s Zacks Rank #3 when combined with an ESP of 0.00% makes surprise prediction difficult.
Note that stocks with Zacks Ranks of #1, #2 and #3 have a significantly higher chance of beating earnings. The Sell-rated stocks (#4 and #5) should never be considered going into an earnings announcement.
ABBVIE INC Price and EPS Surprise
ABBVIE INC Price and EPS Surprise | ABBVIE INC Quote
Stocks That Warrant a Look
The Earnings ESP for Amgen Inc. (AMGN - Free Report) is +1.10% and it carries a Zacks Rank #3. The company will release second-quarter results on Jul 27.
Intercept Pharmaceuticals, Inc. has an Earnings ESP of +7.45% and carries a Zacks Rank #3. It is expected to report second-quarter results on Aug 3.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>