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Bristol-Myers (BMY) to Post Q1 Earnings: What's in Store?
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Bristol-Myers Squibb Company (BMY - Free Report) is scheduled to report first-quarter 2017 results on Apr 27, before the opening bell. Last quarter, the company missed earnings estimates by 4.55%.
Bristol-Myers’ stock lost 24.2% in the past year, underperforming the Zacks classified Large Cap Pharmaceuticals industry’s loss of 2.8%.
Bristol-Myers has a decent track record so far. The company’s earnings beat estimates in three of the four trailing quarters, with an average positive surprise of 7.26%. Will Bristol-Myers surpass expectations this time as well?
Let's see how things are shaping up for this quarter.
Factors to Impact Q1
Bristol-Myers’ high-profile immuno-oncology drug, Opdivo, should continue to drive the company’s top line in the to-be-reported quarter. Opdivo’s U.S. sales are driven by the melanoma, second-line non-small-cell lung cancer and renal cell carcinoma indications.
Further, recent label expansions into the classical Hodgkin lymphoma and head and neck cancer indications should boost the drug’s sales. However, the lung-cancer market in the U.S became more competitive in 2016 due to the entry of Tecentriq.
Bristol-Myers expects the second-line lung cancer business to be under competitive pressure. As a result, sales of the drug in the U.S is projected be flat in 2017. A potential earlier-than-expected entry of Merck's (MRK - Free Report) Keytruda in combination with chemotherapy will also adversely impact sales. Sales of Opdivo are projected to grow globally.
The virology business is expected to decline significantly in 2017 due to competition from Epclusa. The HIV business continues to face competitive pressure. Particularly, recent launches by other companies in the same space are expected to further impact the Sustiva franchise.
The company trimmed its earnings guidance in Jan 2017 due to the impact of foreign exchange rates and a potential earlier than expected entry of the Keytruda/chemo combination in May. The company now expects earnings in the range of $2.70–$2.90 per share.
R&D expenses are expected to increase in the high-single digit range. Marketing, selling and administrative expenses are anticipated to decrease in mid- to high- single-digit range. The company expects operating expenses to be roughly flat with 2016 levels through 2020.
On the first-quarter earnings call, investors are expected to focus on the company’s performance and label expansion efforts, along with updates on business development activities.
Earnings Whispers
Our proven model does not conclusively show that Bristol-Myers is likely to beat earnings estimates this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. Unfortunately, that is not the case here, as elaborated below.
Zacks ESP: The Earnings ESP for Bristol-Myers is -1.37% since the Most Accurate estimate is 72 cents, lower than the Zacks Consensus Estimate of 73 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Bristol-Myers currently carries a Zacks Rank #3 which increases the predictive power of ESP. However, its negative ESP makes it highly unlikely for the stock to beat earnings this quarter. As it is, we caution against Sell-rated stocks (#4 or 5) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Bristol-Myers Squibb Company Price and EPS Surprise
Here are some health care stocks that you may want to consider, as our model shows that they have the right combination of elements to post an earnings beat this quarter.
Intercept Pharmaceuticals, Inc. has an Earnings ESP of +9.13% and a Zacks Rank #3. The company is expected to release results on May 4.
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Bristol-Myers (BMY) to Post Q1 Earnings: What's in Store?
Bristol-Myers Squibb Company (BMY - Free Report) is scheduled to report first-quarter 2017 results on Apr 27, before the opening bell. Last quarter, the company missed earnings estimates by 4.55%.
Bristol-Myers’ stock lost 24.2% in the past year, underperforming the Zacks classified Large Cap Pharmaceuticals industry’s loss of 2.8%.
Bristol-Myers has a decent track record so far. The company’s earnings beat estimates in three of the four trailing quarters, with an average positive surprise of 7.26%. Will Bristol-Myers surpass expectations this time as well?
Let's see how things are shaping up for this quarter.
Factors to Impact Q1
Bristol-Myers’ high-profile immuno-oncology drug, Opdivo, should continue to drive the company’s top line in the to-be-reported quarter. Opdivo’s U.S. sales are driven by the melanoma, second-line non-small-cell lung cancer and renal cell carcinoma indications.
Further, recent label expansions into the classical Hodgkin lymphoma and head and neck cancer indications should boost the drug’s sales. However, the lung-cancer market in the U.S became more competitive in 2016 due to the entry of Tecentriq.
Bristol-Myers expects the second-line lung cancer business to be under competitive pressure. As a result, sales of the drug in the U.S is projected be flat in 2017. A potential earlier-than-expected entry of Merck's (MRK - Free Report) Keytruda in combination with chemotherapy will also adversely impact sales. Sales of Opdivo are projected to grow globally.
The virology business is expected to decline significantly in 2017 due to competition from Epclusa. The HIV business continues to face competitive pressure. Particularly, recent launches by other companies in the same space are expected to further impact the Sustiva franchise.
The company trimmed its earnings guidance in Jan 2017 due to the impact of foreign exchange rates and a potential earlier than expected entry of the Keytruda/chemo combination in May. The company now expects earnings in the range of $2.70–$2.90 per share.
R&D expenses are expected to increase in the high-single digit range. Marketing, selling and administrative expenses are anticipated to decrease in mid- to high- single-digit range. The company expects operating expenses to be roughly flat with 2016 levels through 2020.
On the first-quarter earnings call, investors are expected to focus on the company’s performance and label expansion efforts, along with updates on business development activities.
Earnings Whispers
Our proven model does not conclusively show that Bristol-Myers is likely to beat earnings estimates this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. Unfortunately, that is not the case here, as elaborated below.
Zacks ESP: The Earnings ESP for Bristol-Myers is -1.37% since the Most Accurate estimate is 72 cents, lower than the Zacks Consensus Estimate of 73 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Bristol-Myers currently carries a Zacks Rank #3 which increases the predictive power of ESP. However, its negative ESP makes it highly unlikely for the stock to beat earnings this quarter. As it is, we caution against Sell-rated stocks (#4 or 5) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Bristol-Myers Squibb Company Price and EPS Surprise
Bristol-Myers Squibb Company Price and EPS Surprise | Bristol-Myers Squibb Company Quote
Stocks That Warrant a Look
Here are some health care stocks that you may want to consider, as our model shows that they have the right combination of elements to post an earnings beat this quarter.
Gilead Sciences, Inc. (GILD - Free Report) has an Earnings ESP of +2.77% and a Zacks Rank #3. The company is scheduled to release results on May 2. You can see the complete list of today’s Zacks #1 Rank stocks here.
Intercept Pharmaceuticals, Inc. has an Earnings ESP of +9.13% and a Zacks Rank #3. The company is expected to release results on May 4.
Zacks’ Best Private Investment Ideas
While we are happy to share many articles like this on the website, our best recommendations and most in-depth research are not available to the public.
Starting today, for the next month, you can follow all Zacks' private buys and sells in real time. Our experts cover all kinds of trades… from value to momentum . . . from stocks under $10 to ETF and option moves . . . from stocks that corporate insiders are buying up to companies that are about to report positive earnings surprises. You can even look inside exclusive portfolios that are normally closed to new investors. Click here for Zacks' private trades >>