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The second-quarter reporting cycle is in full swing. The quarter, undoubtedly, is off to a strong start.

As of Jul 26, 2017, 171 S&P 500 members, accounting for 44.1% of the index’s total market capitalization, reported results, according to Earnings Preview.

Total earnings for these 171 index members were up 8.8% from the year-ago quarter on a 3.4% improvement in revenues. The beat ratio was 78.9% for earnings and 70.8% for revenues.

The earnings momentum is expected to continue through the season. Per the report, total earnings for S&P 500 companies in the second quarter are expected to grow 8.7% year over year on 4.7% higher revenues. This follows 13.3% earnings growth in the first quarter on 7% increase in revenues, the highest in almost two years.

Among the pharma bigwigs, Eli Lilly and Company (LLY - Free Report) and Biogen Inc. (BIIB - Free Report) released their second-quarter results this week. Both the companies beat earnings and revenue estimates and raised their sales and earnings expectations for the full year. Moreover, Vertex Pharmaceuticals Incorporated (VRTX - Free Report) and Amgen Inc. (AMGN - Free Report) reported encouraging second-quarter results on Jul 26, beating estimates on both counts. However, GlaxoSmithKline plc (GSK - Free Report) reported mixed second-quarter results the same day, beating on earnings but missing on sales.

Let’s take a look at two large-cap pharma companies that are set to report second-quarter results on Jul 28.

AbbVie Inc. (ABBV - Free Report)

AbbVie, which is scheduled to release earnings before market opens, had delivered a positive earnings surprise of 1.59% last quarter. AbbVie’s earnings performance has been mixed with earnings beating expectations in two of the last four quarters and meeting the same in the remaining two, resulting in an average positive surprise of 1.65%.

For this quarter, AbbVie has an Earnings ESP of -0.71% and a Zacks Rank #3 (Hold). This does not conclusively show that AbbVieis likely to beat estimates this quarter. The Zacks Consensus Estimate is pegged at $1.40 per share. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

AbbVie Inc. Price and EPS Surprise

AbbVie Inc. Price and EPS Surprise | AbbVie Inc. Quote

AbbVie’s key drug Humira is performing well and is expected to continue to do well in the second quarter. Imbruvica has been recording strong sales since the past few quarters. We expect the trend to continue. However, the HCV franchise continues to be under pricing pressure. (Read More: AbbVie Q2 Earnings: Disappointment in Store?)

Merck & Co., Inc. (MRK - Free Report)

Merck is also scheduled to announce results before the opening bell. Merck has beaten estimates in each of the last four quarters, resulting in an average positive surprise of 4.36%. In the last reported quarter, Merck delivered a positive surprise of 6.02%.

The company has an Earnings ESP of 0.00% and a Zacks Rank #2 (Buy) and thus does not look poised to deliver a beat this time around.

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Merck’s new products like Keytruda (cancer), Zepatier (HCV) and Bridion (sugammadex) injection may drive the top line this quarter. However, the company is expected to face headwinds in the form of genericization, increasing competition and the negative impact of currency exchange. (Read More: Can Merck Pull Off a Surprise this Earnings Season?)

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