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Bristol-Myers (BMY) Beats on Q3 Earnings, Ups 2016 View
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Bristol-Myers Squibb Company’s (BMY - Free Report) third-quarter 2016 earnings of 77 cents per share beat the Zacks Consensus Estimate of 65 cents and surged 97% from the year-ago period.
Total revenue of $4.92 billion was also above the Zacks Consensus Estimate of $4.75 billion. Moreover, reported revenues jumped 21% from the year-ago quarter. Strong product sales drove the top line in the reported quarter.
Quarterly Details
Global revenues were up 22%, when adjusted for foreign exchange impact. Excluding Erbitux, global revenues were up 26% or 27%, when adjusted for foreign exchange impact.
Sales in the U.S. surged 36% to $2.8 billion, while international revenues improved 5%. Adjusted for foreign exchange impact, international revenues were up 7%.
Leukemia drug Sprycel raked in sales of $472 million, up 15%. Melanoma drug Yervoy contributed $285 million to the top line during the reported quarter, up 19%.
Opdivo, which is approved for multiple cancer indications, generated revenues of $920 million, higher than $840 million in the second quarter of 2016.
However, performance of key drugs in the Virology unit was disappointing. Sales of Baraclude declined 4% to $306 million. Both the Reyataz and Sustiva franchises deteriorated 12% and 17% to $238 million and $275 million, respectively.
Nevertheless, sales of Eliquis were $884 million during the reported quarter, up 13.8% sequentially. Bristol-Myers has a partnership with Pfizer Inc. (PFE - Free Report) for Eliquis. Bristol-Myers’ HCV franchise contributed $379 million to its top line, down 6%. Orencia revenues were up 18% to $572 million.
Adjusted research and development (R&D) expenses in the quarter increased 5.5% to $1.1 billion while marketing, selling and administrative expenses dipped 2.6% to $1.1 billion.
Gross margin was 73.5% in the quarter, compared with 73% in the year-ago quarter.
2016 Earnings Guidance Raised Again
Bristol-Myers has raised its earnings expectations for 2016 once again. The company now projects earnings in the range of $2.80 to $2.90 per share (old guidance: $2.55 to $2.65). The Zacks Consensus Estimate for earnings stands at $2.63.
Bristol-Myers also provided its earnings guidance for 2017. The company expects earnings in the range of $2.85 to $3.05 per share. The Zacks Consensus Estimate for earnings stands at $2.90.
R&D expenses are now expected to increase in the high-single digit range. Previously, the company had anticipated R&D expenses to increase in the mid-teen range.
Marketing, selling and administrative expenses are anticipated to remain flat. Previously, the company had projected marketing, selling and administrative expenses to decrease in the low single-digit range.
Bristol-Myers announced a transformation in its operating model to focus resources on the company’s highest priorities, accelerate its pipeline and streamline the infrastructure. The company expects operating expenses to be roughly flat with 2016 levels through 2020.
The company also announced a new $3 billion share repurchase authorization, which is incremental to the current repurchase program (announced in Jun 2012), under which the company has approximately $1.1 billion remaining.
Bristol-Myers delivered yet another strong quarter with both the top line and the bottom line beating expectations. Robust sales of drugs like Opdivo, Orencia, Eliquis, Sprycel and Yervoy in the quarter drove the top line. The company has raised its earnings guidance once again for 2016, which is encouraging. Meanwhile, we are positive on Bristol-Myers’ efforts to develop its pipeline.
Bristol-Myers carries a Zacks Rank #3 (Hold). A couple of better-ranked stocks in the health care sector include BioMarin Pharmaceutical Inc. (BMRN - Free Report) and Incyte Corporation (INCY - Free Report) . While BioMarin sports a Zacks Rank #1 (Strong Buy), Incyte carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Incyte’s earnings estimates for 2016 and 2017 were up a respective 10% and 2.1% over the last 60 days. The company has beaten earnings estimates thrice in the last four quarters with an average surprise of 335.16%.
Loss estimates for BioMarin have narrowed from 28 cents to 25 cents for 2016 and from $1.16 to $1.11 for 2017 over the last 60 days.
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Bristol-Myers (BMY) Beats on Q3 Earnings, Ups 2016 View
Bristol-Myers Squibb Company’s (BMY - Free Report) third-quarter 2016 earnings of 77 cents per share beat the Zacks Consensus Estimate of 65 cents and surged 97% from the year-ago period.
Total revenue of $4.92 billion was also above the Zacks Consensus Estimate of $4.75 billion. Moreover, reported revenues jumped 21% from the year-ago quarter. Strong product sales drove the top line in the reported quarter.
Quarterly Details
Global revenues were up 22%, when adjusted for foreign exchange impact. Excluding Erbitux, global revenues were up 26% or 27%, when adjusted for foreign exchange impact.
Sales in the U.S. surged 36% to $2.8 billion, while international revenues improved 5%. Adjusted for foreign exchange impact, international revenues were up 7%.
Leukemia drug Sprycel raked in sales of $472 million, up 15%. Melanoma drug Yervoy contributed $285 million to the top line during the reported quarter, up 19%.
Opdivo, which is approved for multiple cancer indications, generated revenues of $920 million, higher than $840 million in the second quarter of 2016.
However, performance of key drugs in the Virology unit was disappointing. Sales of Baraclude declined 4% to $306 million. Both the Reyataz and Sustiva franchises deteriorated 12% and 17% to $238 million and $275 million, respectively.
Nevertheless, sales of Eliquis were $884 million during the reported quarter, up 13.8% sequentially. Bristol-Myers has a partnership with Pfizer Inc. (PFE - Free Report) for Eliquis. Bristol-Myers’ HCV franchise contributed $379 million to its top line, down 6%. Orencia revenues were up 18% to $572 million.
Adjusted research and development (R&D) expenses in the quarter increased 5.5% to $1.1 billion while marketing, selling and administrative expenses dipped 2.6% to $1.1 billion.
Gross margin was 73.5% in the quarter, compared with 73% in the year-ago quarter.
2016 Earnings Guidance Raised Again
Bristol-Myers has raised its earnings expectations for 2016 once again. The company now projects earnings in the range of $2.80 to $2.90 per share (old guidance: $2.55 to $2.65). The Zacks Consensus Estimate for earnings stands at $2.63.
Bristol-Myers also provided its earnings guidance for 2017. The company expects earnings in the range of $2.85 to $3.05 per share. The Zacks Consensus Estimate for earnings stands at $2.90.
R&D expenses are now expected to increase in the high-single digit range. Previously, the company had anticipated R&D expenses to increase in the mid-teen range.
Marketing, selling and administrative expenses are anticipated to remain flat. Previously, the company had projected marketing, selling and administrative expenses to decrease in the low single-digit range.
Bristol-Myers announced a transformation in its operating model to focus resources on the company’s highest priorities, accelerate its pipeline and streamline the infrastructure. The company expects operating expenses to be roughly flat with 2016 levels through 2020.
The company also announced a new $3 billion share repurchase authorization, which is incremental to the current repurchase program (announced in Jun 2012), under which the company has approximately $1.1 billion remaining.
BRISTOL-MYERS Price, Consensus and EPS Surprise
BRISTOL-MYERS Price, Consensus and EPS Surprise | BRISTOL-MYERS Quote
Our Take
Bristol-Myers delivered yet another strong quarter with both the top line and the bottom line beating expectations. Robust sales of drugs like Opdivo, Orencia, Eliquis, Sprycel and Yervoy in the quarter drove the top line. The company has raised its earnings guidance once again for 2016, which is encouraging. Meanwhile, we are positive on Bristol-Myers’ efforts to develop its pipeline.
Bristol-Myers carries a Zacks Rank #3 (Hold). A couple of better-ranked stocks in the health care sector include BioMarin Pharmaceutical Inc. (BMRN - Free Report) and Incyte Corporation (INCY - Free Report) . While BioMarin sports a Zacks Rank #1 (Strong Buy), Incyte carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Incyte’s earnings estimates for 2016 and 2017 were up a respective 10% and 2.1% over the last 60 days. The company has beaten earnings estimates thrice in the last four quarters with an average surprise of 335.16%.
Loss estimates for BioMarin have narrowed from 28 cents to 25 cents for 2016 and from $1.16 to $1.11 for 2017 over the last 60 days.
Confidential from Zacks
Beyond this Analyst Blog, would you like to see Zacks' best recommendations that are not available to the public? Our Executive VP, Steve Reitmeister, knows when key trades are about to be triggered and which of our experts has the hottest hand. Click to see them now>>