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Drug Stocks Q1 Earnings Releases on Apr 25: LLY, BIIB, NVS
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As the Q1 earnings season gets in full swing this week, we believe this quarter is on track to see the highest growth in almost three years. As of Apr 21, 2017, 95 S&P 500 members, accounting for 24.9% of the index’s total market capitalization, reported results, according to the Earnings Preview report. Importantly, we saw that an above-average proportion of companies beat estimates, particularly revenue estimates.
Total earnings for these 95 index members were up 14.3% from the year-ago quarter on a 4.6% improvement in revenues. The beat ratio was 72.6% for earnings and 62.1% for revenues.
The positive earnings growth momentum is expected to continue through the season. Per the report, total earnings for S&P 500 companies are expected to grow 9.1% year over year on 6% higher revenues. Please note that estimates for the current period (second-quarter 2017) are also looking up.
Among the pharma bigwigs, only Johnson & Johnson (JNJ) has reported so far. J&J reported mixed first-quarter results, beating on earnings but missing on sales. This was the second consecutive sales miss for J&J due to a slowdown in pharmaceutical product sales. J&J’s lower-than-expected performance has left the investment community worrying about how the rest of the sector will perform.
Here we have three pharma giants that are set to report first-quarter results on Apr 25. Let's see how things are shaping up for this quarter.
Lilly, which is scheduled to release earnings before the market opens, had delivered a negative earnings surprise of 4.04% last quarter. Lilly’s performance has been rather poor with earnings missing expectations in three of the last four quarters, while beating in only one, bringing the average negative surprise to 3.39%.
For this quarter, Lilly has an Earnings ESP of +1.04% and a Zacks Rank #3 (Hold), indicating a likely positive surprise. The Zacks Consensus Estimate is pegged at 96 cents.
New products like Trulicity, Cyramza, Taltz and Jardiance supported the top line in the past two quarters. We expect the trend to continue in the first quarter of 2017 as well. However, decline in the sales of Alimta, Cymbalta and Zyprexa are expected to continue due to the loss of exclusivity. (Read More: Eli Lilly to Report Q1 Earnings: What's in the Cards?)
Our previous article showed Lilly was not likely to beat on earnings this quarter. However, estimates changed thereafter and we are reasonably certain of an earnings beat this earnings season.
You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Biogen, a well-known name in the multiple sclerosis (MS) market, is also scheduled to announce results before the opening bell. Biogen’s earnings performance has been pretty impressive so far, having delivered back-to-back positive surprises. The average earnings beat over the last four quarters is 5.86%.
Last quarter, the company delivered a positive earnings surprise of 1.41%.
Biogen expects relatively stable demand for both its key MS drugs, Tecfidera and Tysabri in 2017 as patient growth in ex-U.S. markets offset the modest decline in the U.S. (Read More: What's in Store for Biogen this Earnings Season?)
The Swiss pharmaceutical giant is also expected to report before market opens. In the last reported quarter, Novartis recorded a positive earnings surprise of 2.75%. Overall, the company has posted an average positive earnings surprise of 2.38% in the four trailing quarters.
The company has an Earnings ESP of 0.00% and a Zacks Rank #5 (Strong Sell).We caution against Sell-rated stocks (Zacks Rank #4 or 5) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
The loss of exclusivity of some of the key drugs in Novartis’ portfolio is hurting the top line. We expect the negative trend to continue in the first quarter of 2017. (Read More: Novartis Q1 Earnings: Will the Stock Disappoint?)
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Drug Stocks Q1 Earnings Releases on Apr 25: LLY, BIIB, NVS
As the Q1 earnings season gets in full swing this week, we believe this quarter is on track to see the highest growth in almost three years. As of Apr 21, 2017, 95 S&P 500 members, accounting for 24.9% of the index’s total market capitalization, reported results, according to the Earnings Preview report. Importantly, we saw that an above-average proportion of companies beat estimates, particularly revenue estimates.
Total earnings for these 95 index members were up 14.3% from the year-ago quarter on a 4.6% improvement in revenues. The beat ratio was 72.6% for earnings and 62.1% for revenues.
The positive earnings growth momentum is expected to continue through the season. Per the report, total earnings for S&P 500 companies are expected to grow 9.1% year over year on 6% higher revenues. Please note that estimates for the current period (second-quarter 2017) are also looking up.
Among the pharma bigwigs, only Johnson & Johnson (JNJ) has reported so far. J&J reported mixed first-quarter results, beating on earnings but missing on sales. This was the second consecutive sales miss for J&J due to a slowdown in pharmaceutical product sales. J&J’s lower-than-expected performance has left the investment community worrying about how the rest of the sector will perform.
Here we have three pharma giants that are set to report first-quarter results on Apr 25. Let's see how things are shaping up for this quarter.
Eli Lilly and Company (LLY - Free Report)
Lilly, which is scheduled to release earnings before the market opens, had delivered a negative earnings surprise of 4.04% last quarter. Lilly’s performance has been rather poor with earnings missing expectations in three of the last four quarters, while beating in only one, bringing the average negative surprise to 3.39%.
For this quarter, Lilly has an Earnings ESP of +1.04% and a Zacks Rank #3 (Hold), indicating a likely positive surprise. The Zacks Consensus Estimate is pegged at 96 cents.
New products like Trulicity, Cyramza, Taltz and Jardiance supported the top line in the past two quarters. We expect the trend to continue in the first quarter of 2017 as well. However, decline in the sales of Alimta, Cymbalta and Zyprexa are expected to continue due to the loss of exclusivity. (Read More: Eli Lilly to Report Q1 Earnings: What's in the Cards?)
Our previous article showed Lilly was not likely to beat on earnings this quarter. However, estimates changed thereafter and we are reasonably certain of an earnings beat this earnings season.
You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Biogen Inc. (BIIB - Free Report)
Biogen, a well-known name in the multiple sclerosis (MS) market, is also scheduled to announce results before the opening bell. Biogen’s earnings performance has been pretty impressive so far, having delivered back-to-back positive surprises. The average earnings beat over the last four quarters is 5.86%.
Last quarter, the company delivered a positive earnings surprise of 1.41%.
The company has an Earnings ESP of -0.81% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Biogen expects relatively stable demand for both its key MS drugs, Tecfidera and Tysabri in 2017 as patient growth in ex-U.S. markets offset the modest decline in the U.S. (Read More: What's in Store for Biogen this Earnings Season?)
Novartis AG (NVS - Free Report)
The Swiss pharmaceutical giant is also expected to report before market opens. In the last reported quarter, Novartis recorded a positive earnings surprise of 2.75%. Overall, the company has posted an average positive earnings surprise of 2.38% in the four trailing quarters.
The company has an Earnings ESP of 0.00% and a Zacks Rank #5 (Strong Sell).We caution against Sell-rated stocks (Zacks Rank #4 or 5) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
The loss of exclusivity of some of the key drugs in Novartis’ portfolio is hurting the top line. We expect the negative trend to continue in the first quarter of 2017. (Read More: Novartis Q1 Earnings: Will the Stock Disappoint?)
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market. Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020. Click here for the 6 trades >>