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The earnings season is off to a flying start with almost 75% of the companies having surpassed expectations. The performance has been quite impressive for Biotech companies, with major players beating market estimates. President Donald Trump’s failure to implement the healthcare bill was a positive for the biotech space (read: Can Biotech ETFs Continue to Surge Higher?).


This week four major biotech players announced their quarterly results. Amgen Inc (AMGN - Free Report) , Gilead Sciences (GILD - Free Report) , Biogen Inc (BIIB - Free Report) and Alexion Pharmaceuticals (ALXN - Free Report) , all beat earnings and revenue estimates (read: Forget Big Tech, Biotech ETFs are Soaring Higher).


Earnings in Focus


Amgen reported second-quarter 2017 adjusted earnings of $3.27 per share on July 25, 2017, beating the Zacks Consensus Estimate of $3.09 and increasing more than 15.1% from $2.84 per share in the year-ago quarter. Moreover, it also beat the consensus estimate on the revenue front. The company reported revenues of $5.810 billion, which surpassed the consensus estimate of $5.666 billion and increased 2.14% from $5.688 billion in the year-ago quarter.


The company updated its full-year non-GAAP EPS guidance to the range of $12.15–$12.65 from $12–$12.6. It also updated its revenue guidance to the range of $22.5–$23 billion from $22.3–$23.1 billion. The company’s shares lost around 3.2% at market close on July 26, 2017, after its updated guidance fell short of analyst expectations.


Gilead Sciences reported second-quarter 2017 adjusted earnings of $2.51 per share on July 26, 2017, beating the Zacks Consensus Estimate of $2.11, but decreasing more than 17.1% from $3.03 per share in the year-ago quarter. Moreover, it also beat the consensus estimate on the revenue front. The company reported revenues of $7.141 billion, which surpassed the consensus estimate of $6.359 billion but decreased more than 8.1% from $7.776 billion in the year-ago quarter.


The company updated its full-year revenue guidance to the range of $24–$25.5 billion from $22.5–$24.5 billion. The company’s shares gained around 0.95% at market close on July 27, 2017, owing to the EPS and revenue beat.


Biogen Inc reported second-quarter adjusted earnings per share of $5.04 on July 25, 2017, beating the Zacks Consensus Estimate of $4.36 but decreasing more than 3.2% from $5.21 per share in the year-ago quarter. The company reported revenues of $3.078 billion, which surpassed the consensus estimate of $2.812 billion and increased roughly 6.35% from $2.894 billion in the year-ago quarter.


The company updated its full-year non-GAAP EPS guidance to the range of $20.8–$21.4 from $20.45–$21.25. It also increased its revenue guidance to $11.5–$11.8 billion. The company’s shares gained more than 3% in pre-market trading due to the better-than-expected results but closed around 1% lower on July 25, 2017.


Alexion Pharmaceuticals Inc reported second -quarter adjusted earnings per share of $1.31 on July 27, 2017, beating the Zacks Consensus Estimate of $1.08 and increasing roughly 40.9% from $0.93 per share in the year-ago quarter. The company reported revenues of $912 million, which surpassed the consensus estimate of $848 million and increased roughly 21.1% from $753 million in the year-ago quarter.


The company updated its full-year non-GAAP EPS guidance to the range of $5.4–$5.55 and increased its revenue guidance to $3.45–$3.525 billion. The company’s shares were up around 2.20% at market close on July 27, 2017, primarily due to the better-than-expected results.


We will now discuss a few ETFs with high exposure to the companies discussed.


iShares Nasdaq Biotechnology ETF (IBB - Free Report)


This fund seeks to provide exposure to the biotech industry. It has AUM of $9.91 billion and charges a fee of 47 basis points a year. The fund has 8.38% exposure to Biogen, 8.03 to Gilead, 7.96% to Amgen and 4.26% to Alexion (as of July 26, 2017). The fund has returned 10.49% in the last one year and 20.5% year to date (as of July 27, 2017). It currently has a Zacks ETF Rank #2 (Buy) with a High risk outlook (read: How Kite Pharma Is Revolutionizing the Fight Against Cancer).


VanEck Vectors Biotech ETF (BBH - Free Report)


This fund has AUM of $699.9 million and charges a fee of 35 basis points a year. The fund has 11.22% exposure to Amgen, 10.37% to Gilead, 5.87% to Biogen and 5.44% to Alexion (as of July 27, 2017). The fund has returned 12.35% in the last one year and 20.47% year to date (as of July 27, 2017). It currently has a Zacks ETF Rank #2 with a High risk outlook (read: 5 Reasons Why Biotech ETFs are Soaring).


Ultra Nasdaq Biotechnology ETF (BIB - Free Report)


This fund has AUM of $470.81 million and charges a fee of 95 basis points a year. The fund has 8.33% exposure to Biogen, 7.98% to Gilead, 7.91% to Amgen and 4.23% to Alexion (as of July 26, 2017). The fund has returned 15.75% in the last one year and 41.79% year to date (as of July 27, 2017).


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