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Analyst Blog

The Q3 earnings season has almost come to an end, with 445 S&P 500 members (as of Nov 9) – accounting for 89% of the index’s total market capitalization – having reported results, according to the latest Earnings Preview.

While total earnings for these index members were up 4.0% from the year-ago quarter, revenues were also up 2.7% year over year. The beat ratio was 72.8% for earnings and 55.3% for revenues.

The quarter, in the beginning, saw more numerous positive surprises than historical periods. However, since last week, positive surprises have been about in line with historical trends. The proportion of companies beating both earnings and revenue estimates are modestly tracking above historical periods, though not remarkably. Nonetheless, earnings growth for this quarter is on track to be positive, after five consecutive quarters of earnings decline for the S&P 500 index.

Coming to the results of the pharma sector, quite a few of the large-cap companies posted better-than-expected third-quarter results. Biogen Inc (BIIB - Free Report) , Merck & Co., Inc (MRK - Free Report) and Amgen Inc. (AMGN - Free Report) beat estimates for both earnings and sales. However, some large pharma companies – Lilly, Allergan, Gilead Sciences Inc. (GILD - Free Report) and Pfizer Inc. (PFE - Free Report) – announced softer-than-expected results. While Allergan, Lilly and Pfizer missed estimates for both earnings and sales, Gilead’s earnings fell short of expectations and revenues just about surpassed.

A couple of companies from the healthcare sector are expected to report their third-quarter results on Nov 11. Let's see how things are shaping up for their respective announcements.

Recro Pharma, Inc. (REPH - Free Report)

Recro Pharma posted a negative surprise of 36.07% in the last reported quarter. The company’s performance has been weak, with earnings missing estimates twice while surpassing the same in one out of the three trailing quarters. This resulted in an average negative earnings surprise of 22.26%.

RECRO PHARMA Price and EPS Surprise

 

RECRO PHARMA Price and EPS Surprise | RECRO PHARMA Quote

The Zacks Consensus Estimate for the quarter is pegged at a loss of 71 cents per share. The company has a Zacks Rank #3 (Hold) and an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

XBiotech, Inc. (XBIT - Free Report)

XBiotech delivered a negative surprise of 20.0% last quarter. XBiotech’s performance has been far from encouraging, with earnings missing estimates thrice while surpassing the same only once out of the four trailing quarters. This resulted in an average negative earnings surprise of 16.23%.

XBIOTECH INC Price and EPS Surprise

 

XBIOTECH INC Price and EPS Surprise | XBIOTECH INC Quote

The Zacks Consensus Estimatefor the quarter is pegged a loss of 46 cents per share. The company has an Earnings ESP of 0.00% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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