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Is a Beat in the Cards for AbbVie (ABBV) in Q2 Earnings?
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We expect AbbVie Inc. (ABBV - Free Report) to beat expectations when it reports second-quarter 2018 results on Jul 27, before market open. In the last reported quarter, the company delivered a positive earnings surprise of 3.89%.
Shares of AbbVie have declined 7.6% compared with the industry‘s decrease of 1.3% so far this year.
Notably, AbbVie’s earnings history is quite impressive with the pharmaceuticals company outpacing estimates in all the last four quarters with an average beat of 2.39%.
Let’s see how things are shaping up for the company this quarter.
Factors to Consider
AbbVie’s flagship product, Humira, which is approved for several inflammatory indications, continues to witness strong demand trends despite launch of drugs with new mechanisms of action and competition from indirect biosimilars. The positive sales growth trend is expected to continue in the second quarter. The Zacks Consensus Estimate for Humira is pegged at $5.2 billion.
The company also has a strong oncology portfolio. Imbruvica, which is currently approved for quite a few indications, showed significant growth rate in the first quarter on the back of continued uptake in the front-line CLL market and steady gains across other indications. The drug, which AbbVie is developing and marketing with Johnson & Johnson (JNJ - Free Report) , has successfully completed a phase III study, evaluating it in combination with Gazyva in first-line chronic lymphocytic leukemia. In June, a regulatory application for label expansion Imbruvica in Waldenström's macroglobulinemia was accepted by the FDA. Although, these factors will have no impact on sales this quarter, a potential approval will certainly boost sales going forward. The Zacks Consensus Estimate for the drug is pegged at $843 million.
Other drugs, namely Duodopa and Creon, are also likely to come up with encouraging performance in the soon-to-be-reported quarter. The Zacks Consensus Estimate for Duodopa and Creon sales is $104 million and $216 million, respectively.
AbbVie’s hepatitis C virus (“HCV”) segment has also shown impressive growth on the back of strong demand for Mavyret. The drug has become a major growth driver for AbbVie in a short time following its launch. We expect the trend to continue this quarter. However, Viekira may continue to see declining sales, affected by intense pricing and competitive pressure in the HCV market.
The company’s investigational rheumatoid arthritis candidate, upadacitinib, progressed well during the quarter with successful completion of two phase III studies from the SELECT program. However, the FDA has extended the review period of marketing application for elagolix seeking approval for pain management associated with endometriosis. AbbVie also submitted regulatory application in the United States and Europe seeking approval risankizumab for treating moderate-to-severe plaque psoriasis.
The company may continue to see higher operating expense due to ongoing clinical studies and submission of regulatory applications. However, share buyback worth almost $7.5 billion is expected to drive EPS.
Outlook for Second Quarter
AbbVie expects earnings per share for the quarter to be in the range of $1.94 and $1.96. Revenues are expected to be driven by operational growth of 15% and a favorable currency impact of 3%.
Humira’s sales are expected to grow 10% domestically and international sales are estimated to be approximately $1.6 billion. Oncology drug, Imbruvica, is expected to bring sales of $700 million while HCV global sales are estimated to be $950 million. Almost two-fifth of HCV sales will come from the U.S. markets.
Earnings Whispers
Our proven model shows that the stock is likely to beat on earnings this quarter as it has the right combination of two key ingredients — a positive Earnings ESP and a favorable Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) — for this to happen.
Earnings ESP: Earnings ESP, which represents the difference between the Most Accurate Estimate ($1.98) and the Zacks Consensus Estimate ($1.97), stands at +0.11%.. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: AbbVie has a Zacks Rank #3, which increases the predictive power of ESP. The combination of its positive Earnings ESP and Zacks Rank #3 increases the odds of an earnings surprise.
We caution against the Sell-rated stocks (#4 or 5) going into an earnings announcement, especially when the company is seeing negative estimate revisions.
Gilead Sciences (GILD - Free Report) is slated to announce financial figures on Jul 25. The company has an Earnings ESP of +0.15% and is a Zacks #2 Ranked player.
The Hottest Tech Mega-Trend of All
Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
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Is a Beat in the Cards for AbbVie (ABBV) in Q2 Earnings?
We expect AbbVie Inc. (ABBV - Free Report) to beat expectations when it reports second-quarter 2018 results on Jul 27, before market open. In the last reported quarter, the company delivered a positive earnings surprise of 3.89%.
Shares of AbbVie have declined 7.6% compared with the industry‘s decrease of 1.3% so far this year.
Notably, AbbVie’s earnings history is quite impressive with the pharmaceuticals company outpacing estimates in all the last four quarters with an average beat of 2.39%.
Let’s see how things are shaping up for the company this quarter.
Factors to Consider
AbbVie’s flagship product, Humira, which is approved for several inflammatory indications, continues to witness strong demand trends despite launch of drugs with new mechanisms of action and competition from indirect biosimilars. The positive sales growth trend is expected to continue in the second quarter. The Zacks Consensus Estimate for Humira is pegged at $5.2 billion.
The company also has a strong oncology portfolio. Imbruvica, which is currently approved for quite a few indications, showed significant growth rate in the first quarter on the back of continued uptake in the front-line CLL market and steady gains across other indications. The drug, which AbbVie is developing and marketing with Johnson & Johnson (JNJ - Free Report) , has successfully completed a phase III study, evaluating it in combination with Gazyva in first-line chronic lymphocytic leukemia. In June, a regulatory application for label expansion Imbruvica in Waldenström's macroglobulinemia was accepted by the FDA. Although, these factors will have no impact on sales this quarter, a potential approval will certainly boost sales going forward. The Zacks Consensus Estimate for the drug is pegged at $843 million.
Other drugs, namely Duodopa and Creon, are also likely to come up with encouraging performance in the soon-to-be-reported quarter. The Zacks Consensus Estimate for Duodopa and Creon sales is $104 million and $216 million, respectively.
AbbVie’s hepatitis C virus (“HCV”) segment has also shown impressive growth on the back of strong demand for Mavyret. The drug has become a major growth driver for AbbVie in a short time following its launch. We expect the trend to continue this quarter. However, Viekira may continue to see declining sales, affected by intense pricing and competitive pressure in the HCV market.
The company’s investigational rheumatoid arthritis candidate, upadacitinib, progressed well during the quarter with successful completion of two phase III studies from the SELECT program. However, the FDA has extended the review period of marketing application for elagolix seeking approval for pain management associated with endometriosis. AbbVie also submitted regulatory application in the United States and Europe seeking approval risankizumab for treating moderate-to-severe plaque psoriasis.
The company may continue to see higher operating expense due to ongoing clinical studies and submission of regulatory applications. However, share buyback worth almost $7.5 billion is expected to drive EPS.
Outlook for Second Quarter
AbbVie expects earnings per share for the quarter to be in the range of $1.94 and $1.96. Revenues are expected to be driven by operational growth of 15% and a favorable currency impact of 3%.
Humira’s sales are expected to grow 10% domestically and international sales are estimated to be approximately $1.6 billion. Oncology drug, Imbruvica, is expected to bring sales of $700 million while HCV global sales are estimated to be $950 million. Almost two-fifth of HCV sales will come from the U.S. markets.
Earnings Whispers
Our proven model shows that the stock is likely to beat on earnings this quarter as it has the right combination of two key ingredients — a positive Earnings ESP and a favorable Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) — for this to happen.
Earnings ESP: Earnings ESP, which represents the difference between the Most Accurate Estimate ($1.98) and the Zacks Consensus Estimate ($1.97), stands at +0.11%.. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: AbbVie has a Zacks Rank #3, which increases the predictive power of ESP. The combination of its positive Earnings ESP and Zacks Rank #3 increases the odds of an earnings surprise.
We caution against the Sell-rated stocks (#4 or 5) going into an earnings announcement, especially when the company is seeing negative estimate revisions.
AbbVie Inc. Price and EPS Surprise
AbbVie Inc. Price and EPS Surprise | AbbVie Inc. Quote
Other Stocks That Warrant a Look
Here are a couple of other health care stocks with the right combination of elements to surpass estimates this time around:
Pfizer (PFE - Free Report) is scheduled to release results on Jul 31. The company has an Earnings ESP of +0.89% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.
Gilead Sciences (GILD - Free Report) is slated to announce financial figures on Jul 25. The company has an Earnings ESP of +0.15% and is a Zacks #2 Ranked player.
The Hottest Tech Mega-Trend of All
Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
See Zacks' 3 Best Stocks to Play This Trend >>